World Bank conditions for energy funds

The document foresees the measures for recovering the sector and the expected financial effect. They start with reduced losses and improved encasing. The plan says that the energy loss will be lowered from 40% to 14% by 2019, while encashment from the same period will increase from 85% to 93%.

Although the improvement of these indicators makes it easier for the finances of this sector, the Bank says that it is not enough, that’s why they have demanded an additional measure, that of increasing fees for consumers with 20% to 25% over the current level. This is a necessary base for equalizing the costs. The average price of electricity is now at 9.5 ALL per kilowatt. The Bank’s growth to 11.5 ALL per kilowatt it will remain to be seen how the government will distribute it and what categories will hold the biggest burden.

Why did the energy system fail?
 
The document makes a thorough explanation of the causes that brought the financial collapse. They say that the fatal hit was given by the privatization of the distribution system, with a failure that built up a debt of 700 million USD.

The Bank blames CEZ for not being able to reduce losses and finalize the investments, and also the Albanian government for not increasing the energy price on the right time, increasing this way the debt by not paying the institution fees.

The former right centered government is seen as the responsible for the failed distribution privatization. This government not only took the decision, but they also administered the process that later resulted in one of the most expensive debts for the Albanian citizens. This failure is based in irresponsibility, political games and corruptive flirts between the government and CEZ.

Another responsibility for this 1 billion USD failure that will be paid by the Albanian citizens comes from the World Bank itself, which was the exclusive consulent of the Albanian government during the entire process, and they advised the terms and conditions in the sale agreement, being paid with 3 million EUR for this. Money that the citizens paid as a success fee for a failure that almost destroyed the national economy. The World Bank also advised the governing to sell four public hydropower plants to the private operators, by deepening the financial deficit even more.

These are not the only failures in the energy system. There are others, from the pilot experimenting with the community management of distribution, to the sponsoring of the strategic investment at the Vlore thermo central, for which tax payers paid 110 million EUR, but it was never put at work. We cannot deny that Albania owes a lot to the World Bank, from the fall of communism, when they approached with hundreds and millions of USD in funds that softened poverty and improve the life of millions of Albanians. While success and aid deserve gratitude, the responsibilities cannot be denied.

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