Top Channel published an analysis on a World Bank document which has been published along with the $150ml loan to Albania for the energy sector. The World Bank document shows in details the reform that the Albanian government will undertake in this sector and foresees the measures for recovering the sector and the expected financial effects. The document exposes the reduced losses and improved encasing, predicting that the energy loss will be lowered from 40% to 14% by 2019, while encashment from the same period will increase from 85% to 93%.
Even if these indicators performance will improve finances in this sector, it will take other additional measures to be taken, as the increase of fees for customers with 20% to 25% over the current level. This is, according to the World Bank report, a necessary component to equalize the costs. At the moment, the average price of electricity is 9.5 ALL per kilowatt. The WB has requested the increase of price from 9.5 ALL to 11.5 ALL per kilowatt, but the government has not yet specified for which categories will this increase of price be applied.
According to Top Channel, the document makes a thorough explanation of the causes that brought the financial collapse. As the document shows, the fatal hit was given by the privatization of the distribution system, with a failure that built up a debt of 700 million USD. The Bank blames CEZ for not being able to reduce losses and finalize the investments, and also the Albanian government for not increasing the energy price on the right time, increasing this way the debt by not paying the institution fees.
The article highlights some important facts. “Another responsibility for this 1 billion USD failure that will be paid by the Albanian citizens comes from the World Bank itself, which was the exclusive consultant of the Albanian government during the entire process, advertizing regarding the terms and conditions in the sale agreement, and being paid with 3 million EUR for this. The World Bank also advised the governing to sell four public hydropower plants to the private operators, by deepening the financial deficit even more.”
“These are not the only failures in the Albanian energy system,” quotes Top Channel. There are others, from the pilot experimenting with the community management of distribution, to the sponsoring of the strategic investment at the Vlore thermo central, for which tax payers paid 110 million EUR, but it was never put at work. We cannot deny that Albania owes a lot to the World Bank, from the fall of communism, when they approached with hundreds and millions of USD in funds that softened poverty and improve the life of millions of Albanians. While success and aid deserve gratitude, the responsibilities cannot be denied.