Negotiations continue on energy prices after the OSSH privatization

TIRANA, Monday 16–The government of Albania and CEZ Group signed a contract for the sale of 76 percent of the shares, worth 102 Mln Euro, of the Electricity Distribution Company of Albania (OSSH), but negotiations continue on a few remaining details such as energy prices to be paid by the Albanian consumer in the upcoming years.
“We have not closed the deal yet, as the energy tariffs are still under negotiations and we will present a business plan within 90 days where energy prices for consumers will be clearly specified,” Vladimir Schmalz, CEZ’s Director of Mergers and Acquisition, declared a few minutes after signing the contract.
According to the Energy Regulation Agency of Albania (ERE) there is an agreement with the new OSSH owners for a gradual increase of energy prices in the next three years, but not before 2010.
“The government, at the end, will not lose all its instruments in the electric energy market or the price of electric energy,” Genc Ruli said, minister of METE. According to him, if a rise in energy prices will become necessary, the government will be ready to subsidize those in need.
The price increase will reflect the price level in the region. Energy costs in Albania are some of the highest in the region due to an amortized transmission network that accounts for up to 30% of energy loss every year. Also, Albania is dead last in energy bills collectability with close to 50% of the bills in 2008 not cashed in. The new ownership, which has long-term and deep experience with distribution companies restructuring in the Czech Republic, Bulgaria and Romania is expected to address these issues in the upcoming years.
“For CEZ it is another step in consolidation of our position in the region of Southeastern Europe. From a long-term point of view analysts expect that the electricity consumption of Albania will grow by 5 % each year; a faster rate in the region is experienced only in Turkey where the CEZ Group operates as well,” said Martin Roman, Chairman of the Board and CEO of CEZ
ČEZ Group is the leading energy company in Central Europe with 7 million clients and an installed capacity for the production of nuclear, coal fueled, and hydro powered energy of 14300 MW. In 2008, the energy ČEZ Group realized a net profit at the amount of 47.4 billion CZK (1.78 billion EUR), an increase of 11 percent on the previous year, despite the negative influence of the rising financial crisis at the end of the last year.