TIRANA, March 30 – State-run power corporation KESH is seeking to borrow some €218 million from London-based EBRD to refinance its short-term costly loans to local banks.
If approved the loan would allow the country’s biggest electricity producer to replace short-term debts to local banks at an average interest rate of 4.5 percent with a new 15-year loan at a 2 percent rate.
“This will not have extra costs to the state budget as the current portfolio of these credit lines is guaranteed by the government,” said Ani Spahiu, a KESH official.
KESH has accumulated about €250 million in loans and debts to private electricity producers since 2007 due to electricity imports and mismanagement of the electricity distribution operator where grid losses still remain high at about 30 percent.
“The project is linked to a comprehensive program of reforms of KESH and the Albanian energy sector in general which should significantly improve sector management and operational efficiency,” said the EBRD.
The EBRD investment is expected to support a program of reform which aims to include KESH’s corporate governance, market practices and regional trade. “The refinancing of the balance sheet to lengthen tenors will give KESH greater control over its financial situation, relieving it of continuing urgent liquidity concerns,” said the EBRD.
KESH supplies almost 70 percent of Albania’s electricity demand through own hydro-dependent generation mainly from the northern Drin Cascade where the country’s largest hydropower plants are situated.
