Balluku Announces Moratorium on New Hydro Power Plants

Belinda Balluku, the new Albanian minister for energy and infrastructure has announced a moratorium on new hydro power plants after just four days in the job.

In a carefully crafted PR piece published by Reuters, it is claimed that the government wants to make the environment a key concern of its energy policy as well as launch studies into whether its small hydro power plant strategy is actually worth pursuing.

Also announced was an “investigation” into 182 licenses that have been issued to build a total of 440 hydro plants across the country. To date, only 96 are fully operational which means the rest have caused significant environmental impact whist providing little to no benefit for the country.

Ballaku said in a statement that:

“We need a perfect balance between economic development and the protection of our natural riches, which are the greatest wealth we Albanians have.”

The moratorium that Balluku has imposed on all non-operational contracts will be in place until the government can ascertain whether contractors have fulfilled the specifications and deadlines as well as satisfying the necessary environmental requirements. One has to question however, how much power an unknown MP with just four days of experience in her position really has.

Furthermore, the issuing of licenses and signing of contracts is not a matter that the government can just opt out of as and when they choose. For example, the government claimed that it couldn’t cancel the hydro power plants in Valbona, because it would have “to  pay in international arbitration much more than what you can imagine in your worst dream,” as Prime Minister Edi Rama declared.

As it is unclear how the other hydro power contracts could realistically be canceled, it appears as if this is nothing more than a PR exercise carefully timed to suit the electoral agenda.

Albania is almost completely dependent on hydro power for the generation of electric power, with around 100% of all domestically produced electricity being generated in this way. Whilst hydroelectricity is considered as an environmentally friendly alternative to gas, coal, or other methods, the fact that it decimates large swathes of countryside makes it also very unpopular.

The sheer number of approved licenses and proposed power plants is however a little confusing. In 2018, plans were announced in conjunction with SOCAR, the Azeri state-owned gas company for the “gasification” of Albania. One has to wonder, if Albania is predominantly hydro-powered with plans to expand this exponentially, why is there a need to ‘gasify’ the country as well? SOCAR are well known for major deficiencies in their tendering processes, and the Azeri government that own it are currently embroiled in an international money laundering and bribery scandal involving European politicians, to the tune of almost €3 billion.

Ms Ballaku’s statement raised a number of eyebrows as it came just days after the announcement of PS MP Taulant Balla that two hydro power plants were to be built near Holta Canyon, a popular tourist destination and area of outstanding natural beauty on the Devoll river near Gramsh.

Despite the area becoming one of Albania’s most known landmarks and receiving great attention in international media and on social media, the Rama administration thought it was a good idea to grant concessions that would completely destroy it. The concessions were signed by former Minister of Energy Damian Gjiknuri.

Furthermore, the procedures for such concessions have come under scrutiny for lack of transparency and for the fact that they were granted to a company with no experience in the sector. Era Hydro was created in 2016 with just one partner and has zero experience in the construction of hydro plants, or any other area for that matter. The contract for construction was then granted to Klaudia Constructions which also has absolutely no experience in the sector and was also, coincidentally of course, set up in 2016. Additionally, environmental impact assessments were also carried out by a company and individual with no experience. The company itself was sold to two individuals, – one of which owns Sali Elektrik, a company that sells electrical materials, – for a bargain price tag of just €800.

Whether Minister Ballaku’s decision will actually materialise and result in a true overhaul of Albania’s hydroelectric plan, or whether it is just an exercise in good PR designed to temporarily placate those who don’t want their county destroyed, remains to be seen.