Drought brings energy crisis
04/04/2014 00:00
Tear gas and water cannons amid the clashes in the DP opposition protest which ended after three hours in Tirana 26/11 21:13
The energy sector has turned once again into a threat for the budget and
public finances. The difficult drought conditions and the minimal
reserves in hydropower plants have put the government in an urgent need
for 100 million EUR of imported energy.
The two main companies of this sector, the Albanian Power Corporation (KESH) and the CEZ Distribution company, have turned once again to the state budget and to the government’s guarantees for loans.
Top Channel has learned that the Ministry of Finances has been negotiating with the World Bank and other institutions to guarantee emergency funds.
The methods being reviewed now are: first, a guarantee from the government in favor of KESH, for enabling the public company to take loans from private banks. Second, experts from the Ministry of Finances hope that the payment of old debts to private businesses has placed more money in the market and this could favor this solution.
The government has predicted a 10 billion ALL limit for the energy sector. But this might not be enough, since part of the guarantee has been used for other projects related to transmission.
For this reason, another possibility is being discussed in parallel, that of a direct support of KESH with budget funds. This would require a growth of the budget deficit and of the public debt.
But regardless of the solution that will be decided, the energy sector crisis remains the biggest danger for this year’s budget, and the government might be obliged to find money for buying energy.
The citizens will be obliged to contribute once again through taxes. Those who have been correct with their bills, after paying their own, will be obliged to pay another one.
This situation continues for years due to the bad management of this sector. This money could have been used for other purposes.
Top Channel
