Hydropower plant privatization

Albania has signed hundreds of agreements foreseeing the construction of new HPPs, but never was sold an existing one.

But what is the passport of the four hydropower plants that were on sale? Official data from the government and KESH show that Ulza, Shkopet and the two Bistrica HPPs have a power of 77 MW, which equals to 5.3% of the total power production of the Albanian Power Corporate (KESH).

Data show that these four HPPs produce 406 million KWhour energy per year, or 5.5% of the total energy produced by Albania. The average power production in the country generates about 200 million EUR annually, meaning that with these four HPPS the government is selling a business with more than 10 million EUR of annual revenues.
 
HPPs on sale, most profitable

In 2011, when the government published for the first time the plan for giving four HPPs to the private sector, spurred very harsh debates between politicians and experts The first argument was based on the official data showing that the four HPPs on sale have yielded the highest income. Together with the HPP of Lanabregas, which was sold to the Aqueduct in 2010, these HPPs have secured 6% of the total KESH revenues, and took 2.9% of the expenses. This indicator shows that the profits of the HPPs that the government is selling to the private sector are twice higher than the KESH average, confirming this way their advantages.

Secondly, Shkopet and Bistrica are the government assets that have received more funds from the state budget and the German government. This means that the private operator that will buy them will need to spend less money on investments and will have a guaranteed profit. The HPP business per se is very specific, because their management is completely technical. Hence, the privatization will bring no major improvements in management, efficiency or corruption reduction, whicih would have been the case with another public enterprise.

These three arguments have been used by critics to raise the question either the privatization of these HPPs is a step on the right direction or if it is simply dictated by the urgent need of the government for money, 10 months before the general elections.

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