TIRANA, Oct. 4 – The World Bank energy policy remains controversial, with escalating lending for coal and a delay to the energy strategy review, according to Bretton Woods Project, focusing on the World Bank and the IMF to challenge their power, open policy space, and promote alternative approaches. Past Bank-financed energy projects in Albania and Ghana also are proving problematic.
The controversial oil and gas-fired Vlora thermal power plant in Albania looks set to become a textbook example of an IFI-financed white elephant, warns the watchdog. The plant, which was funded by the World Bank in 2004, faced enormous local opposition and an Inspection Panel case. Critics have said right from the beginning that the electricity would not be economical, and after the plant was completed government sources started to confirm that the plant would be used only for reserve purposes.
Last June, it emerged that even though testing of the facility was supposed to start last year, it has not happened yet because of problems with the water pipes. Fidanka McGrath, of NGO CEE Bankwatch Network, said: “The Bank, as the lead lender to this project, should be held responsible. Albania now has more debt to pay and is saddled with a power station that has diminished Vlora’s tourism potential and does not even produce any electricity.”
Vlora thermal power plant
Speaking of the Vlora thermal power plant whose construction has been delayed because of technical problems with sea pipes, Economy Minister Ilir Meta called for measures to minimize costs from delays.
The newly built thermal power plant in the southern city port of Vlora should been ready to produce electricity since May 20, 2010, according to power corporation, KESH.
Experts have often criticized the high cost of electricity produced by the Vlora power plant which is 13 lek per kWh, 5 lek more than the cost of imported electricity.
The new 97 MW, 112 million dollars low-sulphur distillate oil fueled power plant is located at a six-hectare site about six kilometers north of Vlora. The project was supported by a 25 million credit from the World Bank’s International Development Association, USD 37.5 million from the European Bank for Reconstruction and Development, USD 37.5 million from the European Investment Bank, and USD 12.6 million from KESH.
