Albania’s electricity shortages. Lights out

Date: 07/01/06

A more humdrum energy crisis than Ukraine's

THE focus of world energy buffs may have been on Ukraine this week. But parts of the western Balkans have their own energy crisis. Keeping the lights on in Tirana this winter has proved too hard for KESH, Albania's state-owned electricity utility. Low rainfall and a failure to maintain ageing hydropower plants that produce 90% of the country's electricity meant that, for much of November and December, the capital was subject to daily power cuts lasting as long as 18 hours.

Sali Berisha, the centre-right prime minister, says that boosting the power supply is his overriding priority. Mr Berisha's Democratic Party won power last July by pledging reforms, including an end to electricity shortages. Mr Berisha has scrapped two big transport projects for Tirana launched by his Socialist predecessor--a high-speed train link with the airport and a multi-level highway junction--as unnecessary while power cuts are so common.

One problem is that KESH is so short of cash. Subsidies are being cut. The utility has tried to raise revenues by installing more meters. But electricity theft is rife in Tirana's illegally built suburbs, which provide homes to thousands of poor immigrants from the north.

Under communism Albania sold hydropower to its Balkan neighbours. But domestic demand soared in the 1990s, when Albanians who went to work in Greece and Italy sent money back to their families to buy such whizzy new products as dishwashers, hair-dryers and microwave ovens. The price of electricity imported from Bulgaria and Romania rose when these countries, under pressure from Brussels, liberalised their electricity markets. Albania's parliament has now passed legislation to give the utility greater freedom to buy power from abroad, if it can find it. Genc Ruli, the energy minister, struck a deal with distributors in Bulgaria and Romania just in time to prevent big black-outs in Tirana over new year.

With other countries in the region, Albania signed a European Commission-sponsored energy treaty in Athens last October. The pact is meant to promote co-operation by setting up a regional energy market. Yet one diplomat calls the treaty "admirably high-minded, but impracticable at present". It would cost more than $15 billion to build the infrastructure necessary for a proper electricity market across the region, says the World Bank. Albania, the second-poorest country in Europe after Moldova, would struggle to pay.

KESH now plans Albania's first thermal-power plant, a small 120-megawatt unit, near the port of Vlora. Local residents and green groups say it makes no sense to build a power station next to a town that is meant to be a magnet for future tourists. But without reliable power, foreign tour operators, like other foreign investors, will continue to give Albania a miss.

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