From: Artan Rama
Albania: Concerns over Increased Number of HPP Concessions

The total number of hydropower plants (HPP) approved by the Ministry of Infrastructure and Energy has reached 714.

However, the government reports a figure around half that size, corresponding to 259 final contracts and 132 preliminary agreements signed over the last two decades.

In January, the newly appointed Minister of Infrastructure and Energy Belinda Balluku announced that government-signed contracts amounted to permits for construction of 440 hydropower plants. However, this turns out to be incorrect. The data she referred to, which is actually higher (466), was provided by the Agency for the Treatment of Concessions (ATRAKO), and it only reflects 90 percent of the contracts signed by 2013.

According to the ATRAKO List – a World Bank initiative for transparency implemented by the Ministry of Economy – the number of concessionary contracts in the field of hydropower signed so far between the Ministry of Infrastructure and Energy and private companies is 185, which corresponds to a total of 466 registered hydropower plants.

The last entry on the list concerns the concession contract for the construction of the Kalivac Dam, signed in June 2018.

So where are the rest of the hydropower plants?

They are on the list of new electricity generating capacities – with a capacity of less than 2 MW and not subject to concession – approved in accordance with the Council of Ministers Decision no. 822, dated 7.10.2015, “On the approval of procedures for building new capacities…”.

This list is not yet public but was provided through a court ruling following refusal of access to information by the Ministry of Energy. It includes 73 new contracts corresponding to 79 hydropower plants, and a register of 132 unsolicited proposals to build power plants which were approved earlier and correspond to another 144 hydropower plants.

At the end of 2015, the Rama government avoided the method of concessions for approving hydropower plants but did not withhold from issuing further approvals. The government ‘favored’ private companies, excluded investors from bidding, and simplified procedures by transferring the power to approve contracts to the Minister of Energy rather than the expert bid evaluation commission.

According to the Decision of the Council of Ministers (DCM) 822/2015, HPPs below 2 MW were awarded to the first applicant, without any genuine competition between interested investors, in contrast to other HPPs approved through a concession contract.

Since then, excluding the first half of 2019 when the Ministry of Energy announced a moratorium on new permits, the rate of contract approval has been high. In the last three years alone, 223 hydropower plants were approved, approximately six per month. Meanwhile, the process for the full contracting of hydropower plants is ongoing, and so far the ministry has managed to sign a final contract for every three approved hydropower plants.

The busiest year was 2017, with 60 percent of all HPPs approved in three years.

In the ATRAKO list, years 2009 and 2013 have the highest number of contracts signed. All three of these years (along with 2017) have been electoral years. In each of these three years (2009, 2013 and 2017) there were elections in Albania.

The last hydropower plants belong to a concessionary contract signed in 2002 between the Ministry of Industry and Energy and the Italian company Essegei srl for the use of twenty-five domestic hydropower plants built during the communist period, most of which were damaged over the years and most of them were out of order by the year 2000.

So far, authorities have canceled only three hydropower plants (pre-approved but not contracted) and have promised to unilaterally terminate 27 non-performing contracts that correspond to 80 hydropower plants.

There is no public information as to whether such a promise is being implemented, even for a single contract. However, the Ministry of Energy has stated more than once that its 4-month verification period in the first semester of 2019 regarding the implementation of concession contracts’ terms aimed at fulfilling contractual obligations rather than canceling them.

But what does the Ministry of Energy expect to do with non-performing contracts? Will new companies be contracted to meet to meet these obligations? This remains to be seen as so far there is no concrete initiative.

An expert from the Opponents Team of the National Agency of Natural Resources (AKBN) expressed concerns that there is now a risk of further stream fragmentation in watercourses, which will reduce capacities for more powerful hydropower plants and favor a larger number of contracts for smaller plants. According to experts, stream fragmentation is useless and its economic benefit is less than the social or environmental damage it causes.

Thus the total number of approved hydropower plants is 714.

This record comes at a time when conflicts between interest groups are growing, drainage basin management plans have not yet been approved and when the transparency of the Ministry of Infrastructure and Energy is fading in the wake of a fake glittering propaganda.

This article was written in Albanian for