Tough measures to be imposed on violators of hydropower concessions

TIRANA, July 12 – The government has pledged support to private companies involved in construction of hydropower plants but warned of taking strict measures for companies which don’t respect their concession contracts. The statement came on Tuesday during a workshop organized by the IFC where Economy and Energy Minister Nasip Naco reiterated the Albanian government’s stance of being a partner to local and foreign companies interested in constructing hydropower plants by creating the necessary legal and procedural facilitations.
Naco said the ministry had identified 10 to 15 flagrant cases of violations in concessionary contracts, mentioning cases of companies which have been granted concessions since 2007 but have not even registered with the National Licensing Center yet.
According to him, Albanian and foreign businesses have proposed the construction of 280 small, medium-sized and big hydropower plants with an installed capacity of 1,300 MW and 12 wind energy parks with a capacity of 1,600 MW.
Naco also announced the ministry was in the final stage of preparing documentation for the construction of hydropower plants on River Vjosa with a capacity of 300 MW, on Osum River with a capacity of 100 MW and HPPs on the Drini i Zi River where the most important one is the 350 MW Skavica project.
Last week, the first phase of the construction of Ashta hydropower plant, Albania’s 48-MW run-of-river projectנthe fourth large hydropower plant on the northern River Drin cascade and the biggest HPP project during the past 20 years– was completed by the Austrian companies implementing it.
The Euro 160 million project is being implemented by “Energji Ashta,” a 50/50 joint venture between Austria’s Verbund and EVN which are constructing a world innovation in Albania: the largest matrix power plant using small turbines.
Prime Minister Sali Berisha said “we remain determined to make every effort encouraging the construction of 443 hydropower plants in this country. He said government had signed concession contracts for the construction of 220 HPPs during the past three years, 36 of which are under construction.
Four small and medium-sized hydropower plants, currently under state ownership and managed by the Albanian Power Corporation KESH, have been included on the privatization list of 1,280 public assets. The hydropower plants (HPP), which the government intends to sell, include the Ulez and Shkopet HPPs on the River Mat, in northern Albania, and two small HPPs on the Bistrica River, in southern Albania. The four HPPs are reported to have an installed power of 77 Megawatts, accounting for 5.3 percent of hydro electricity produced by KESH.
Small and medium-sized hydropower plants (HPPs), built under concession agreements, accounted for 2 percent of domestically produced electricity in 2010. The Energy Regulatory Entity (ERE) said in its 2010 report that power produced by HPPs of up to 15 MW rose to 159 million kWh, registering a 78 percent increase compared to the end of 2009. Data show some 51 HPPs owned by 19 private companies operate in Albania. Five of them were made operational last year. Since 2008, the business community’s interest in building small and medium sized HPPs has been on the rise following a government decision which authorizes the state-owned power production company, KESH, to buy energy from each HPP built under concession contract. Revenues of companies operating HPPs also rose to 1.1 billion lek (11 million USD) compared to 580 million lek in 2009.