Middle-term Budget Program, MBP, predicts that the energy crisis in Albania will continue for the next three years, from 2008-10. There are three main reasons for this, according to MBP: First, an estimated one-third of the energy gets lost in the distribution network without even reaching consumers. The technology is old and over-consumed. Second, many consumers steal from the network through illegal connections. And finally, imported energy is bought at a very high price in Albania.
The government had tried to resolve the problem by opening the market for private production of electric energy using smaller hydro-electric plants. Also, the new thermo-electric plant in Vlora is expected to ease the crisis by the second half of 2009. Yet, results are not following the planning as hoped for. Only in five out of over 100 concession contracts signed by the government for the construction of small hydro-electric plants, has work begun.
According to MBP, the continuing energy crisis is dangerous for public finances, in particular, and the country, in general. The document states that the Albanian state might lose a huge amount of revenue in the next three years because the Albanian Energy Corporation, AEK, may fail to deposit its returns and is, generally, characterized by troublesome finances. “However”, continues the document, “even though AEK financial situation has signs of improving in the close future, it is almost certain that energy problems will continue.” It may be difficult for the public to feel positive after such a statement since, only recently, the government had to serve as the guarantee for AEK to receive a 40 million euro credit. Prior to this, banks had judged AEK unfit for credit due to the huge debt accumulated during past years.
Further, the government has not been able to raise the necessary awareness among its citizens that energy bills should be paid in order to keep energy flowing. Also, billing government institutions with higher prices so that losses can be cut, somewhat, does not really help the situation. Rather, this simply moves money from one budget to another budget.
In a letter sent to the IMF (International Monetary Fund), the Albanian government admitted that deposits from energy bills had fallen by 73.7% this year, the lowest since 2001. They also announced that planned blackouts would continue in 2008. However, calculations are based upon a normal level of rain. Yet, dry weather might also occur this year, in which case, the programmed black outs will increase far above the optimistic 4%.
