Albania Secures USD 150 M Loan from World Bank for Power Sector RecoveryWorld | November 4, 2014, Tuesday // 13:18| views
Photo by BGNES
The Albanian government has signed an agreement with the World Bank on a loan of USD 150 M.
The loan will go to a power sector recovery project.
Ellen Goldstein, World Bank Country Director for Southeast Europe, praised the Albanian government for preventing a crisis in the energy sector “that would have severe economic, fiscal and social consequences in 2014 and beyond.”
“I can assure you that by early 2013, the power sector was nearing collapse, with demand far outstripping domestic supply, years of negligible investment, staggering technical and non-technical losses, low collection rates and insolvent institutions, including a potentially lengthy and costly dispute between the privatized distribution agency and Government,” Goldstein said Monday at the signing ceremony for the project, according to the World Bank’s press office.
“Fixing the power sector is one of the most important foundations for increased investment, growth and job creation in Albania. Unreliable power supply is seen as a top constraint to doing businesses here. Today, cumulative losses in the energy sector—which are financed by Government--total some ALL 55 billion. That amount would be expected to rise above ALL 80 billion by 2018 if serious reform is not undertaken now,” she underscored.
Goldstein argued that ensuring mutual accountability was the key to reforming the country’s bankrupt and inefficient energy sector.
She pointed out that the reforms in the power sector would have to be sustained for the next 4-5 years, adding that the USD 150 million loan would support the government with medium-term investments and technical advice to reduce losses, improve governance and restore investor confidence in the sector.
“Confidence in the financial sustainability of the sector is the key to unlocking billions of dollars of investment in Albania’s hydropower potential. Increasing generation capacity will gradually reduce reliance on imports and lower the cost of providing electricity to consumers,” the World Bank Country Director for Southeast Europe stated.