Project number:


Business sector:

Power and energy

Notice type:


Environmental category:


Approval date:

08 Jun 2004



PSD disclosed:

06 Apr 2004

Project Description

Construction of a combined cycle power station fuelled by distillate oil located 6 km north of Vlore adjacent to an off-shore oil tanker terminal. The plant size would be between 85MW to 135MW depending on the configuration of the winning equipment bid.

Construction works for the thermo power plant will be done through a single Engineering, Procurement and Construction contract (EPC contract). The EPC contract is expected to be completed in 24 months. The project implementation will be managed by KESH through its Project Implementation Unit (PIU).

Transition Impact

The project would complement and consolidate the transition impact of the two earlier Albanian power projects (sector reconstruction and distribution rehabilitation), which have far reaching objectives in terms of readjusting tariffs to cover costs, improving collection of receivables, eliminating subsidies for budgetary and non-budgetary entities, reducing electricity losses, implementing a sector reform strategy and extending the current management contract for KESH.

The project would help to reduce reliance on hydro generated power in Albania and to ensure continuous provision of electricity, having a potential positive impact on the operations of private and public enterprises in the country. In addition, the project would enable the creation of a TSO, execution of the UCTE Agreement, and creation of an Equalizing Fund (to build fund reserves in good hydrological years).

The Client

The beneficiary company is the Albanian Power Corporation (KESH). KESH, established in 1992, is a vertically integrated state-owned company responsible for the generation, transmission and distribution of electricity in Albania.

EBRD Finance

Parallel financing in the form of a sovereign guaranteed loan of up to €40 million.  The EBRD loan will be used to finance the EPC contract. Other co-financiers are the European Investment Bank (EIB) with up to €40 million, the World Bank (IDA) with €20.3 million and Albanian Power Corporation (KESH) with €10.2 million.

Project Cost

€ 91-110 million

Environmental Impact

Environmental  classification
The Project involves the construction and operation of a new power generation plant with between 85MW to 135MW of power output. Therefore, it has been screened A/0 requiring an Environmental Impact Assessment and associated public consultation.
Information reviewed
1) Final EIA Addendum, Montgomery Watson Harza (MWH) Consulting, December 2003
2) Final EIA report, Montgomery Watson Harza (MWH) Consulting, October 2003
The Environmental Impact Assessment (EIA) and associated public consultation had been carried out in accordance with Albanian EIA legislation and the World Bank environmental guidelines prior to the Bank’s involvement in the project. The Bank’s Environmental Department reviewed the EIA process and concluded that it had been compatible with EBRD EIA requirements. The EIA report itself was found to satisfy the Bank’s environmental information requirements to a large extent. The addendum to the EIA was prepared to address the Bank’s requirements for additional information on certain specific issues.
Key Environmental issues
After evaluation of seven potential sites including sites near Durrës, Elbasan, Korçë, Fier, Shëngjin and two sites near Vlorë – Vlorë A and B – the site in Vlorë B was selected as the best site for the new power plant. The selected site is a six hectare green field site adjacent to the offshore oil tanker terminal located on the Adriatic coast north of the Port of Vlorë. The site is situated on a relatively barren coastal area with little vegetation or wildlife. The site is about two kilometres south of Narta Lagoon. The lagoon and the surrounding ecosystem of approximately 10,000 hectares is composed of forests, wetlands, sand dunes, beaches and agricultural land, and is home to a number of endangered species. Parliament is expected to designate the Narta Lagoon as a "Protected Area" soon. The Government has confirmed that the proposed Vlore power plant site will be outside of the boundaries of the Narta Lagoon protected area.
Construction Phase
Emissions to air
Fugitive dust may be emitted from construction works and machinery as well as from truck traffic. The diesel power construction machinery and vehicles will also have other air quality impacts. The dirt roads and exposed construction areas can be moisturised during the dry season to prevent or minimise the fugitive dust emissions. Emissions from concrete batching plants can be controlled with fabric filters or cyclone separators. Diesel powered construction equipment and vehicles can be well maintained to minimise tailpipe emissions. Air dispersion modelling showed that the likely fugitive dust concentrations would meet World Bank and European Union ambient air quality standards.
Noise from construction activity may be significant. Noise emitting equipment should comply with the applicable EU noise standards and should be properly maintained.
Ground and surface water 
Minor short-tern lowering of the groundwater table during dewatering of foundation excavations is not expected to have a significant impact. Water from dewatering activities and storm water discharges can be managed to minimise water quality impacts to nearby surface water resources such as the Narta Lagoon, Bay of Vlore and the Vlore floodplain. Sediment control measures such as sediment sumps and retention weirs could be used, as necessary, to minimise sediment transport off site. Visible oil or grease can be skimmed off the surface using absorbent pads.
Accidental spills of fuels or other materials could contaminate coastal or inland waters. Workers can be trained in the proper handling, storage and disposal of hazardous or toxic materials. A written emergency response plan should be prepared and the workers should be trained to follow specific procedures in the event of a spill.
Aggregate sources 
Existing stone and gravel quarrying operations close to the site are assessed to provide sufficient resources for construction requirements without depleting local resources. These sites will need to be regarded and revegetated following use.
Marine habitat 
Installation of the cooling water intake and discharge outfall pipelines could have impacts on the marine habitat. The work may involve dredging and disposal of excavated material, which could cause sediment release to the surrounding marine environment. Any marine disposal should be done away from sensitive fisheries or breeding grounds and timed to be outside of the upwelling period. Water construction activities associated with the pipelines for the cooling water intake and discharge systems will need to be performed during periods of low fish activity.
Operational Phase
Emissions to air 
Combustion of the distillate oil will result in emissions of sulphur dioxide, nitrogen oxides, carbon monoxide, carbon dioxide, particulate matter less than 10 microns, and total suspended particulate. The particulates may contain small amounts of trace metals. However, the generation facility will be designed to meet the more stringent of the EU or World Bank emission and ambient air quality impact standards. Sulphur dioxide emissions will be controlled by limiting the sulphur content of the fuel. Nitrogen oxide emission will be controlled through burner management and water injection to the combustion turbines. Particulate emissions will be reduced through good combustion control to minimise the products of incomplete combustion. The ambient air quality modelling showed that the plant will meet the World Bank and EU standards for carbon monoxide, nitrogen oxides, particulates and sulphur dioxide and that the air quality in Vlore will remain within the “moderate” category.
Significant noise levels can result from operation of the turbines. The transformers in the switchyard can also generate significant noise levels. The combustion turbines would be designed to limit noise to 85 decibels (A), and thereby meet EU and World Bank requirements.
Oil spills 
Oil spills could occur during the shipping, unloading and transfer of the fuel to on-site storage. A floating boom should be used to contain spillage during ship unloading and disconnection procedures. Frequent inspection and maintenance of facilities can minimise spilling from the transfer pipeline or the mooring buoy.
Water intake 
Water intake for the once-through cooling system may have a localised impact on the marine ecosystem in the vicinity of the intake. The primary impacts of concern are impingement of marine life on the intake screens and entrainment of marine species in the cooling water system. Design of location, inlet spacing and inlet velocity can be used to minimise the impact on fish communities. An intake bar screen would be used to prevent large fish from being entrained in the system.
Thermal discharge 
Once-through plant cooling water that is discharged to the Bay of Vlore will increase temperatures in the vicinity of the discharge location. Thermal impact modelling showed that the potential increase in water temperature would be less than the World Bank's guideline of three degrees Celsius. If the impacts are found to be greater than predicted after operation begins, modifications to the diffuser will be made to enhance diffusion of the thermal plume.
Chemical discharge in cooling water 
Chemical discharge in the plant cooling water is expected to be negligible.
Wastewater discharge 
The wastewater discharge will be designed to comply with World Bank standards.
Hazardous waste 
The amount of hazardous waste created would be very low and originate from maintenance sources. The waste would consist primarily of spent lubricants, used rags and spent clean-up solvents. There would be no ash residue from the combustion of the distillate fuel oil and no sludge accumulation from fuel storage.
Proximity to the Narta Lagoon 
There will be no adverse impacts on the Narta Lagoon from the thermal discharge or wastewater discharge from the plant. The plant meets all air quality standards, including those set to protect vegetation and ecosystems.
Environmental Mitigation and Management Measures
An Environmental Management Plan (EMP) has been developed for this project and will be implemented by KESH. The EMP defines the measures needed to prevent, minimise, mitigate, or compensate for adverse impacts, to improve environmental performance and to ensure compliance with applicable environmental standards during both the construction and operation of the plant. The recommendations for main environmental mitigation measures include waste management and disposal planning, noise abatement measures, installation of a sewage treatment facility, emergency and oil spill response planning as well as the purchase of necessary response equipment. These are being incorporated in the project design.
Disclosure of Information and Public Consultation
Three public consultation meetings were held in Vlorë regarding the project to introduce the project to the public, to discuss the scope of the EIA study and to discuss the draft EIA. The meetings were well attended by a varied group of people, and the comments were incorporated further into the EIA process and project planning. In the framework of potential participation of the EBRD in the project, the EIA materials have been made available, in accordance with EBRD’s public disclosure and consultation procedures, for a 120-day public review and comment period from 9 February to 7 June 2004 at the following locations:
  • KESH office in Vlore
  • Public Relations Office, KESH
  • EBRD Resident Office in Tirana
  • Business Information Centre, EBRD, London, UK, tel +44 207 338 6747
Monitoring and Reporting
A detailed environmental monitoring plan has been developed to verify that environmental impact assessments are accurate and that unforeseen impacts are detected at an early stage to allow corrective measures to be implemented, if needed. The key monitoring includes:
During the construction phase the plan provides for dust, noise and water discharge monitoring.
During the operation period, monitoring is planned for air emissions and air quality, noise, water discharge and biological marine environment, as well as a routine inspection of the oil pipeline, storage and handling area.
A specific environmental monitoring consultant is planned to be engaged for the project to ensure the monitoring will be carried out in accordance to the plan.
KESH will report to EBRD annually on the measured environmental impacts and on the implementation of the EMP. The plant commissioning will be subject to an environmental review. EBRD environmental specialist may conduct monitoring visits to the site when and if deemed appropriate. In addition, independent environmental monitoring audits will be carried out periodically (every three years) throughout the lifetime of the plant operation.
There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation


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