TIRANA, Jan. 21 – Norway’s Statkraft will finance the replacement infrastructure as part of the Devoll hydropower plant, the biggest ever hydro energy project that is being built in southeast Albania.
Energy Ministry officials say the financing by the company came after the Albanian government failed to fulfill its contract obligations because of costs exceeding Euro 70 million.
Under the deal, the Albanian government should have already finished the construction of the replacement infrastructure of Banje-Gramsh, the Trashovica bridge prior to the inundation from the creation of the reservoir.
“One of the main impacts of the project is the loss of access infrastructure, such as roads and bridges. In this regard, according to the concession agreement the Albanian government is responsible for the re-establishment of the access. The replacement infrastructure should be in place prior to the inundation from the creation of the reservoir,” say company officials.
Speaking at the parliamentary trade committee this week, deputy Energy Minister Ilir Bejtja said Statkraft expects the infrastructure cost to be lower than what the Albanian government estimated.
“The financing itself has the terms of a soft loan which is not financed under a sovereign credit but directly from the company. The only guarantee they have requested is the adoption by parliament of an addition to the concession contract,” said Bejtja.
“In this way, we will not expose the budget toward new obligations which would increase the debt level,” said Bejtja.
The new project will connect all villages affected by the inundation, providing them access to a new national road.
Albania’s fragile electricity sector is projected to get a boost by 2018 when two new hydropower plants by Norway’s Statkraft are expected to increase the country’s wholly dependent electricity generation by around 20 percent. The Banja and Moglice HPPs, part of the Euro 535 million Devoll Hydropower project, are being built on the Devoll Rover, about 70 km southeast of Tirana. The power plants will produce 729 GWh annually, increasing the Albanian electricity production by almost 17 per cent.
Statkraft says it has decided to build the two hydropower plants Banjë and Moglicë with a combined capacity of 243 MW and an annual production of about 700 GWh. “The investment frame for the two first plants is estimated to EUR 535 million. The plants are expected to be completed in 2016 and 2018, respectively,” the company says in a statement.
The power plants are located on the Devoll river, about 70 km southeast of the capital Tirana.
Devoll Hydropower, a Euro 950 million project, was set up as a 50/50 joint venture between EVN and Statkraft after the two companies won in 2009 a concession to build three hydropower plants on the Devoll River. In 2013, Statkraft acquired EVN’s 50 per cent share and is now 100 per cent owner of the company and the construction project.
The Devoll hydropower project is currently the first large scale public-private-partnership investment in the country and one of the largest hydropower investments in the Balkans. With a total capacity of 243 MW, the Devoll river project will generate approximately 700 GWh of renewable, environmentally-friendly energy each year and increase the current electricity production in Albania by approximately 17 percent. It will supply more than 300,000 Albanian households.
