“This additional financing will contribute to safeguarding the major hydroelectric power plants in Albania and helping prevent a possible catastrophe from a dam failure,” said World Bank’s Lvovsky
TIRANA, Feb. 21 – The World Bank has lent the Albanian government an additional USD 21.6 million to support the rehabilitation of three dams in Drin River cascade, northern Albania, where the country’s three major HPPs accounting for the overwhelming majority of domestically-produced hydropower are situated. The additional dam safety financing will complement the original International Development Association (IDA) credit of US$35.3 million to support the government in safeguarding major hydroelectric plants on the Drin River cascade. It will also help improve the operational efficiency and enhance the stability of power supply for the regional electricity market, says the World Bank.
“This additional financing would enable the successful implementation of the original project, thus contributing to safeguarding the major hydroelectric power plants in Albania and helping prevent a possible catastrophe from a dam failure,” said Kseniya Lvovsky, Country Manager for the World Bank Office in Albania last weekend.
The additional loan will help finance the completion of two main activities; the rehabilitation of the spillways in three dams of the Drin River cascade (Fierza, Komai and Vau i Dejes hydropower plants); and the rehabilitation of the Komani hydropower plant through refurbishment of electro-mechanical equipment and replacement of existing control, protection, and monitoring systems.
The Energy Community of South East Europe APL Program – the APL 5 for Albania Dam Safety Project – is part of a larger Dam Safety program financed in parallel by other international financial institutions such as SECO-Switzerland, KfW Germany, the European Bank for Reconstruction and Development (EBRD), and the Government of Albania.
USD 100 mln loan, no deal yet
Since early 2012, the Albanian government has been negotiating with the World Bank over the possibility of a USD 100 million loan which would be much needed for the Albanian government at a time when major infrastructural works are underway, public debt cost is on the rise and revenues have stagnated. No deal has been reached yet as the World Bank has said it is ready to assist the Albanian government with a USD 100 million loan or even more only if the public debt currently at the legal limit of 60 percent of the GDP is gradually reduced and the economy is kept growing by improving its competitiveness
The World Bank says it will approve USD 55 million in new loans for 2012 to help strengthen social safety nets as economic growth has slowed down and remittances, a vital source of income for the poor have been shrinking since 2008.
Issuing another Eurobond is impossible at these times as the Eurozone debt crisis has put yields at staggering rates compared to the affordable 7.5 percent yield for the 5-year 300 million Euro bonds government sold late in 2010.
Borrowing from the domestic market would also harm domestic businesses and individuals as lending keeps growing at moderate rates due to bad loans at a record 18 percent of the total credit. Raiffeisen Bank Albania, the leading commercial bank in the country, has announced it has withdrawn available financing for Albania. The only solution has been borrowing through T-bills and T-bonds in auctions organized by the Bank of Albania.
