The World Bank’s Albania director, Jane Armitage, on Thursday described the outcome of the sale of Albania’s utility company to the Czech firm CEZ in 2009 as ‘deeply disappointing’.“Three and a half years later we share the deep disappointment of Albanian citizens and the government with the outcomes of this privatization,” Armitage said in Tirana.
The Czech purchasers of the company, CEZ, “have not been able to reduce technical commercial losses, which were the expectation and, on the contrary, they have increased; they have not been able to increase billing and collection, the situation has got worse,” Armitage added.
Although the government and CEZ are still negotiating, the company announced on Wednesday that it might withdraw from the Albanian electricity market.
In 2009, Albania sold 76 per cent of its shares in Operatori i Sistemit te Shperndarjes, OSSH, a company that manages the electricity distribution of up to 1 million consumers, with revenues of over 300 million euro per year.
CEZ bought the stake for 102 million euro and the World Bank helped smooth the sale with a $100 million partial risk guarantee in case the Czech company opted out.
But CEZ failed to cut losses and stem theft in the grid, forcing the government to subsidize costly imports for its state-owned power corporation, KESH.
Last month the government issued €50 million in loan guarantees for KESH to cover the cost of imports.
Armitage said that the World Bank was preparing an emergency loan for Albania, to cover the cost of these imports and put its electricity market on a sustainable basis.
“We will be providing support as best we can to the government both in the immediate few months during these negotiations, but we are also preparing an emergency energy credit to help the government finance electricity imports and also continue reforms to put the sector on a sustainable basis,” Armitage said.
“We are working on a 100 million loan to the country for the energy sector on emergency basis,” she concluded.