Albania’s Electricity Sector Gets Support From Italy

TIRANA, Nov.6 – Italian electricity transmission and dispatching company Terna said it will implement a project of a 2.9 million euro ($3.7 million) to provide technical assistance to Albania’s electricity transmission operator OST and management training to Albanian power utility KESH. The website of Terna reported the company’s win of a tender for the project entirely funded by Italy and involving a 30-month commitment. Terna’s assistance will cover four main areas. First it is aimed at completing the unbundling process of the activities of Albania’s electricity supply chain at technical and managerial level. This includes improving the economic and financial terms. Second, Terna will help the power utility to design efficient future plans for the development and renovation of the existing infrastructure. Third, it will assist KESH to integrate the country’s national electricity system in the regional and the European markets. Finally it aims at the introduction of value creation management criteria. An interesting feature of the last assistance component is the novel idea of possible participation of private capital. This will be realized by combing the training program for Albanian technicians with assistance services, according to the company. The press release made clear that “This activity forms part of Terna’s development strategy in the Balkans aimed at opening up new channels through which to procure electricity for the Italian system. Given its geographical position and the characteristics of its energy system, Albania represents a potential base for development of regional relations.”
Around $1.3 billion in investments are necessary to revive the electricity sector in Albania, where outdated power facilities are unable to generate enough electricity. The rearrangement strategies in the energy sector started in the early nineties, after the fall of communism. The national energy strategy recommends that KESH has to be split into three separate divisions and all 83 small hydroelectric power plants are to be sold or be given by concession. Part of the strategy is also the privatization of domestic oil companies that mange the current reserves.