None of the investors interested to acquire the four hydropower plants placed bids on the Sept. 14 tender because of concerns about Albania’s electricity market
TIRANA, Sept. 17 – Government will announce a new tender on the sale of four small and medium-sized hydropower plants after a tender held last weekend failed to attract interest from potential bidders. Speaking after the tender, deputy Energy Minister Sokol Dervishaj, also the head of the bids evaluation committee, said the companies had demanded more time, concerned over how they will transmit and sell power produced from the four hydropower plants.
“The companies also request improving the process related to the relationship the buyers of these HPPs will have with KESH (the state-owned power utility) and procedures how the production, sale and transmission of electricity from these HPPs will be made,” said Dervishaj.
“Investors stressed the need to solve issues related to the financing of the privatization from top European financial institutions as well as the address of a number of questions related to the Albanian electricity market,” said the Energy Ministry, adding that it will seriously consider the demands before the new tender announcement.
The ministry says it will continue cooperating with potential investors and its international consultant, the IFC, so that it achieves the best possible result.
Opposition Socialist Party MPs present in the bid opening called on government to withdraw from the sale of the four HPPs which account for around 6 percent of the annual power generation and prove profitable. The sale of the HPPs at ridiculously low prices would also deteriorate the situation with KESH, already suffering from decreasing water levels in its main northern Drin cascade and involved in a chain of debts, said opposition Socialist Party MP Erjon Brace.
Prime Minister Sali Berisha announced later this week the next tender on the sale of the HPPs will be held on Nov. 25, only three days before Albania marks its 100th independence anniversary. Sherefedin Shehu, a ruling majority MP did not rule out the option of giving the hydropower plants on concession.
Speaking at an economic forum, opposition leader Edi Rama said government was losing USD 20 million annually from the privatization of the four hydropower plants.
“These four hydropower plants are part of a whole system, part of which is also the Albanian Power Corporation, which is our property and has USD 280 mln in debts. This system has been set up to rob, to win staggering amounts and make the economy go bankrupt,” said Rama.
Government has postponed the tender on the HPPs sale for several times after the company’s refusal to submit bids or their low intended bids. Austria’s Verbund had previously evaluated the four hydropower plants at Euro 80 million, almost half the amount the Albanian government intends to collect.
The Energy Ministry decided to open bids on Bistrica HPPs, southern Albania and the Ulez and Shkopet HPPs, northern Albania, on Sept. 14 because of the complexity of this process and so that the procedures do not affect each other.
Two Austrian companies and a French one have been qualified to submit bids on the privatization of four small and medium sized hydropower plants. Austria’s EVN and Verbund which have formed a joint venture to build a giant HPP in northern Albania are competing separately in this tender along with France’s CNR & CN’AIR. Turkey’s Calik and Limak Energy, Italy’s Tozi Spa and an Austrian-Israeli consortium have also recently entered the race for the purchase of the four HPPs. The four HPPs are reported to have an installed power of 77 Megawatts, accounting for 5.3 percent of hydro electricity produced by state run Power Corporation KESH.
Government hopes to collect around Euro 150 million from the sale of the four HPPs. All four HPPs are in good condition especially the southern Bistrica HPPs which have been upgraded under a Euro 30 million investment.
