TIRANA, Sept. 12- The Energy Regulating Entity has proposed to seek alternative financing for the construction of transmission lines connecting Elbasan to Tirana, in view of the fact that Italian financing so far has not been successful. The ERE proposes to seek more secure and reliable funding from commercial lenders with less rigid interest from donors, or even the state budget. The amounts required are not very large, thus the idea of seeking alternative funding sounds feasible to experts. The transmission segment from Tirana-Elbasan is part of the large energy transmission line project that will connect Tirana to the Montenegrin capital of Podgorica, and facilitate energy imports. The large project is financed by the German government, but the specific segment is funded by Italian financing, which has not been provided for the last decade. Other works that have been frozen, due to unsuccessful Italian financing, are the substation of Kashar and the new Dispatcher national Center. Official assessments for the rehabilitation and strengthening of the transmission lines in the energy sector will be a huge investment worth at least 53.5 billion leks ($ 530 million), through the end of 2008. Out of this, 40 billion leks will be financed by foreign investors and 13.5 leks will be financed by KESH. The rehabilitation of the distributing sector in the largest urban centers with a capacity of 20 kV will cost 12 billion leks. This will ensure better connections between urban and rural centers. Construction of lines began last year. The main project remains the connection between Elbasan and Podgorica, with a capacity of 400kV and a new dispatcher center in Tirana which would be financed by the Italian government contributing 51.5 million euro and the German government adding 43.1 million euro. However, the German money cannot be allocated without the Italian contribution being in place, so the project has remained frozen. The fund has been de juro disbursed by the “Cooperazione Italiana” every year and also approved by the Albanian parliament, but the fact remains that de facto none of this money has been granted. Last year, the Financial Times published an article about the situation in which the Albanian vote in the Security Council was solicited to choose between assisting Germany and Italy. The conflict of interest was emphasized and the journal accused Italy of exerting pressure on the Albanians by withholding the money. The crisis was resolved with an agreement between the sides, but the money remained frozen.
The last effort was done by the former KESH head, Andis Harasani, who tried to use the Spanish government as an intermediate negotiating partner, but even this attempt failed. In view of the importance that this project has in ameliorating the ongoing energy crisis in Albania, Economy minister Genc Ruli and current KESH Director, Gjergji Bojaxhi, have warned that if the Italian fund is not activated they will immediately seek alternative funding.
