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EBRD loan assists electricity rehabilitation in Albania
Improving distribution will help reduce demand on generation
The European Bank for Reconstruction and Development is to assist the rehabilitation of Albania's power sector via a €24 million loan to national power-company KESH. The funds will enhance Albania's capacity to distribute energy to businesses and households. Contractors, chosen through open tendering by KESH, will carry out the work.
The EBRD loan supports a €200 million initiative, the Power Transmission and Distribution Project, to rehabilitate Albania's electricity system. The project includes other contributions from the World Bank, European Investment Bank, Japan Bank for International Cooperation, the Swiss, Italian and Spanish Governments, as well as KESH itself.
Albania's power sector relies heavily on hydropower. Low rainfall over recent years has left the country experiencing frequent energy shortages, and Albania is forced to import much of its electricity. The project aims to improve energy efficiency by reducing losses of electricity during transmission and distribution, thereby allowing the country to reduce dependence on imports.
By reducing losses, explained Anthony Marsh, Director of the EBRD's Power and Energy Team, more electricity gets to where it should be going, namely the customer. This, said Mr Marsh, relieves pressure on the generation and supply side of the business and makes the country's energy sector more sustainable. The project will also assist KESH in strengthening management. Mr Marsh said good management is critical to the long-term maintenance of the energy network.
State-owned KESH was established in 1992 to be responsible for the generation, transmission and distribution of electricity in Albania as well as trading energy with foreign countries. Its distribution network is 45,512 km in size, transmission 2,418 km and installed generation capacity 1,684 MW.
The loan from the EBRD is sovereign guaranteed, and the work being carried out is an essential step towards the reform and eventual privatisation of the energy sector in Albania.
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