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Regional market for energy, Published on : 28 August 2015

AEI Updates August 2015 Posted on Tue, September 01, 2015 14:47:34

Your excellences,

Ladies and Gentlemen,

It gives me quite a pleasure to address you today, and to honor the Energy Group in its 10th anniversary. Allow me very briefly to start speaking about my home country, Albania which does not only hold the Energy Presidency, but it’s a country where the energy sector reform has taken a central stage.

We have lived for years with the residual that energy and electricity in particular were commodities provided by God to citizens for free. Consequences of this attitude combined with mismanagement in the energy sector were dramatic. The level of unpaid electricity and stolen electricity skyrocketed, which in turn brought state as well as private energy companies on the verge of dramatic bankruptcy. The risk of the system collapse, blackout and of a financial mess for the whole country appeared very clear on the horizon. The economic and social consequences would have been devastating. And this is why when, when I took office in 2013, we made rebooting the energy sector and made it a strategic priority. We knew this would force us to make tough decisions, but we had no other choice. And so we started by settling inherited dispute with the owner of our electricity distribution, the Czech investor, who has completely failed to stop what was supposed to be stopped when the privatization happened, and practically has transformed the company in the main obstacle to undertake reforms.

Therefore, the successful negotiations with the very help of the Energy Community, mediated directly by the Vice Director, opened the path to go further with the reforms. And once we accomplish that, we could start move to restructuring and reconstructing the energy sector, and get to manage a company with 1.1 billion US dollars debts accumulated since 2007. Or, to give you a clear idea, 7% of our GDP, because of a yearly 50% theft and technical losses in a system where investments have been practically inexistent when it comes to distribution. And, with the help of the Energy Community and International Financial Institutions we reenergized our energy company, and today I am very proud to say we are one of the first Energy Community countries to have adopted an electricity law, realizing EU’s third energy package this year. And we are about to do the same in the areas of gas, renewable energy and energy efficiency.

We are very grateful to the Secretariat for providing us with concrete and practice assistance in drafting these laws, as it has been done also with other countries. The Energy Community legal framework provides us the tools and concrete know-how to one of the most far-reaching and controversial reforms in Albania in recent years, reform that I am convinced will turn Albania’s energy sector and its natural resources into an asset rather than a liability.

Albania is the second richest country in hydropower potential after Norway, and Albania is a country that so far has been used to live with this potential as a burden and as a problem, not as a resource and as an asset.

But, it goes without saying that we still need the Energy Community support, and in addition to the energy sector reforms in line with EU rules and principles, another main objective of the Energy Community is to integrate regional markets. And it is common sense that Albania’s hydropower a clean but sometimes very capricious energy source be complemented by Serbia’s coal resources, when necessary. An open energy market among countries in the region will not only improve our supply security, it will also make sure that we can provide the cheapest available energy, and thus the best deal for all our customers.

Unfortunately, vested interests and false dreams of energy autarchy in all our countries have prevented in the near past the regional market from becoming a reality. And I am firmly convinced that we will have to take regional integration in Vienna, the Energy Community, as seriously as we take domestic reforms. And through the support of the Energy Community, regional integration should be our common goal because if, when it comes to the connectivity and to the road infrastructures and to other sectors that we need to develop, we are very much relying on EU funds and we cannot do without, when it comes to integrating the market of energy first and foremost we can rely on our own will and on our own conviction that together we can only make better, and together we can not only have historical photos, which are by the way gone now, but we can really improve our economies.

And I am very happy to inform you that at today’s Western Balkans Summit, not only did we agree on a list of 5 energy infrastructure projects, crucial for the region, we also adopted a list of measures aimed at establishing a regional electricity market, government structure, needed to maximize the region’s potentials. These measures include power exchanges, joint capacities allocation and a regional balancing market. We will do our utmost to implement these measures in the course of the next year. We’ll do this in close coordination with one-another and, of course, in close cooperation with the Energy Community. This will benefit customers and citizens in all our countries.

The Energy Community founded in Athens in 2005, and associating the European Union and countries of Southeast Europe, was an energy union avant la lettre. The Energy Union is a vision for Europe’s future energy integration. In the face of such volatile resource markets, climate change and political instability, the European countries will have to collaborate more closely with each-other to overcome our relative insignificances in an increasingly globalized energy world. These challenges do not stops at the borders of EU member states. They are truly pan European.

Building on our existing energy community its unique set of institutions and procedures, and the experience gained over the last ten years, the Energy Union comprised with member states and contracting parties alike, and go beyond the current borders of the Energy Community.

Ten years after the creation of the Energy Community, and over 60 years after the start of the European Integration process in the 1950s, it is time to revive the ideas of Robert Schumann and Jean Monett, and to apply them to one of the most crucial sectors, energy, and to united wider Europe under the same values, principles and rules.

Creating energy connectivity within the Western Balkans is not only vital for our continual growth in our countries, but it will aid the European Union’s ongoing struggle for energy security. Thus, EU support for our region’s concrete actions plans for energy sector expansion and interregional connection should be of the highest priority. It is precisely due to a body like the Energy Community that when the Western Balkans are made to prosper, or when Greece, Serbia, Albania or the EU prosper, the respective prosperity won by each is shared by all.

As climate changes are one of the prominent tests for our time, again this quite hot space is a proof, creating an energy union does not only offer a solution to energy security challenges, it offers a tremendous opportunity to mitigate climate change as a region. In view of the COP21 talks in Paris the European Union should insure the Western Balkans are part of the EU’s actions on climate change. Support by the European Union to the Western Balkan countries in reaching their climate change goals go a long way in signaling to the rest of the world that Europe will continue to lead on climate change policy. But the other way is showing something very different. If we are let alone in this struggle, which again is impossible to be dealt with our own means, then the moral high ground that Europe has so far on climate change is put in question.

Integrating energy goals goes beyond efforts in the energy sectors alone. The Energy Community experience also shows that the multilateral cooperation based on principles such fairness, transparency and the rule of law enhance the stability for our relations in general. Through the day-to-day work of the Energy Community an added value emerges, which is rare in politics and a unique achievement by Europe, and it’s called solidarity and mutual trust and benefit.

The future of the Energy community will eventually exceed its current region. The accession of Ukraine, Moldova and soon Georgia already testifies that. In the Balkans we will not look enviously at this broadening of the community but proudly at having contributed to a better integration of the pan European energy markets and systems. As today’s Summit as well as the Albanian experience show, this contribution is ongoing and matters more each and every day. The Energy Community will not lose its relevance in the next ten years and beyond. On the contrary, and this is my firm conviction, but it is up to us, the countries of Europe, to take the commitments laid out in the treaties seriously, to channel their potential and to develop it further in accordance with the needs and the challenges we know we will face in the future.

For now, looking back at 10 successful years of the Energy Community, we should allow ourselves a moment of satisfaction and deserved, I believe, celebration. I would like to thank very much the Energy Community Secretariat and its director for hosting us in this beautiful library today, and for continuing to press on all of us to fight together climate change. Thank you all for having come to today’s celebration and for having fought so hard in the past to create this community. I wish the Energy Community continued success, a long-lasting cooperation and effective expansion in the future. Thank you very much!


The 10th anniversary of the Energy Community gathered together in Vienna Summit senior representatives of Member States. In this context, a conference was held for the 10th anniversary of the establishment of the Energy Community, under the patronage of Prime Minister of Albania, Edi Rama. The Energy Community was established on the basis of an international treaty in 2005. Its main aim was approaching the countries of South East Europe and the Black Sea with the European Union, and expanding domestic energy markets of the EU, in addition to attracting investments in energy production and supply networks.

Among the leading panelists were Serbian Prime Minister Vucic, Prime Minister of Ukraine Yatsenyuk, European Commission Vice President Sefcovic, EC Commissioner for Enlargement Hahn, Chairman of the Industry and Energy Committee in the European Parliament Busek.

In his speech at the event, Vice-President of the European Commission Maros Sefcovic said that the Energy Community was created10 years ago to enhance the cooperation of the regional countries with the EU, and to integrate the energy markets of the Balkan countries with one-another and EU, but over time, the Energy Community has been transformed from a regional instrument of pre-accession to an instrument for our common security of supply and cooperation in the energy field.

Albania currently holds the Presidency of the Energy Community.

The Timeline in Three Photo of the Trans-Adriatic Pipeline, ACERC 31 August 08

AEI Updates August 2015 Posted on Mon, August 31, 2015 23:52:39

Europe to Fund Balkan Transport, Energy Projects, Igor Jovanovic, BIRN, Belgrade 31 AUG 15

AEI Updates August 2015 Posted on Mon, August 31, 2015 21:00:17

After the Western Balkans summit, which took place in Vienna on August 27, it has been announced that European institutions will grant around 200 million euro for 10 transport and energy infrastructure projects in six Western Balkans countries.

The total value of the agreed projects is around 600 million euro and they are to be conducted in Serbia, Montenegro, Macedonia, Albania, Kosovo and Bosnia.

The projects will be co-financed under the 2015 Instrument for Pre-Accession programme, IPA, and Western Balkans Investments Framework and by European financial institutions such as the European Investment Bank, European Bank for Reconstruction and Development, EBRD, and the German government-owned development bank, KfW.

The Western Balkans Investments Framework was developed jointly with the European Commission, the EBRD and the Council of Europe development bank, as well as by EU member states and Western Balkan countries themselves.

Among the projects to be developed with EU financial help are the Albania-Macedonia power interconnection and the grid section of Trans-Balkan Electricity Corridor in Montenegro and Serbia.

Twenty-four different other infrastructure projects were confirmed as of great importance for the region.

Completion of these projects should stimulate GDP growth by 1 per cent in each Western Balkan country and create around 200,000 new jobs in total, Serbian media reported.

Among the so-called “pre-identified” projects are the highway from Nis in Serbia to the Albanian coastal city of Durres through to the Kosovo capital of Pristina and the highway from Croatia to the Greek border via Montenegro and Albania.

The EU will also co-finance the Bosnia-Croatia road interconnection on the Mediterranean corridor as well as the rail interconnection between Serbia and Macedonia.

Western Balkans officials voiced satisfaction with the offer.

Milo Djukanovic, the Montenegrin Prime Minister, said his country stood to get 45 million euro from the EU for improving rail transport and electric transmission.

He said that without economic support from European institutions, the Western Balkans could not truly develop and provide a better life for its citizens.

“I consider this a very valuable contribution of the EU to the further improvement of transport and railway infrastructure,” Djukanovic said.

Mijat Lakicevic, a Belgrade-based economist, said it was a good news that the EU will co-finance some projects since regional transport infrastructure is worse now than it was 20 or 30 years ago. “Infrastructure is a precondition for development,” Lakicevic told BIRN.

On the other hand, he warned that 200 million euro was not enough to go round the entire region.

“We also have a problem with the quality of proposed projects and the region is already faced with unsuccessful and unfinished projects,” Lakicevic said.

The summit in Vienna is a part of the Berlin Process, a five-year process started last August and marked by yearly summits in order to underline the EU’s commitment to enlargement.

The focus of the initiative is on the six Balkan countries that are not yet EU members: Albania, Bosnia, Kosovo, Macedonia, Montenegro and Serbia. The next summit is scheduled for France next year.

A New Candidate for Energy Leadership – Albania? by Fron Nahzi

AEI Updates August 2015 Posted on Sat, August 29, 2015 23:09:46

Some of the world’s biggest countries
have been stepping up in recent days with wide-ranging plans to cut global
warming emissions in advance of a United Nations summit meeting write Gary Dirks and Fron Nahzi in Policy Review.And as nations that have long avoided
the subject turn their attention to the environment, Albania is showing promise
of becoming a leader in sustainable development in a region whose coal-based
systems have been major polluters.

Albania? The country that for the last couple of
decades has slid into the news only as a source of Balkan violence and
political and economic dysfunction?

Yes. With EU and US backing, the new government of Prime
Minister Edi Rama is working to rebuild the rule of law. His party’s resounding
win in local elections in June demonstrates public confidence in the ongoing
reforms and efforts to not only put Albania on track for EU membership but also
to generate solid investment opportunities that only a few years ago appeared

Renewable energy is a good example. When he
first took office in 2013, Rama started out by imposing strict
enforcement on the payment of electric bills, which 42 percent of users had not
been paying. He even sacked the deputy minister of environment for failing to
pay her electric bills. This showed that government ministers do not stand
above the law.

Now Rama can go further by expanding legal and
judicial reform to help Albania find a steady supply of affordable energy. To
do so will help free the country from the grips of corrupt officials and
attract much-needed foreign investment.

One attractive opportunity is the Trans Adriatic
Pipeline, which will bring natural gas from the Caspian across Albania to
Italy. While not a zero-carbon fuel, natural gas is cleaner than the coal
that dominates southeast Europe power generation, and natural gas power plants
can provide flexible and reliable power generation for the region.

A more exciting set of options can be explored with
the extensive network of dams in Albania by employing what’s called “pumped
storage” – storing and generating energy by moving water. As the European
grid expands into the Balkans, renewable power from northeast Europe, which at
times is in surplus, could be stored by an Albanian pumped storage
system. The same system would allow Albania to pursue domestic wind and
solar projects to power its own economy and to export to neighbors in need of
clean energy. Kosovo, Albania’s neighbor to the northeast, is also
seeking sources of reliable energy. Currently, Kosovo’s electric power is
sourced from two outdated, deteriorating, and highly polluting lignite-fired
power plants. Kosovo could benefit immediately from new energy sources
starting up in Albania.

Prime Minister Edi Rama’s reforms combined with EU
polices and emissions-trading systems provide a mutually beneficial opportunity
to Albania and potential multinational investors. To attract investors for these
projects, however, Albania needs to continue momentum away from its image as a
“mafia state” toward a nation rooted in the rule of law by implementing further
judicial reforms.

At a recent conference on Albania’s justice system,
top EU and US representatives applauded Rama’s reforms and emphasized that
these types of rigorous reforms must continue. Ambassador Romana Vlahutin, head
of the EU Delegation to Albania, noted, “The reform must also ensure full
independence of the prosecution from any political or other undue influence,
especially prosecution of high level corruption and organized crime

In today’s turbulent investment climate,
multinationals have limited favorable geographic locations and political
environments where investments are likely to prove profitable – even fewer in the
clean energy sector. Albania is rapidly becoming an ideal prospect, but it must
ensure a hospitable business environment to attract the right investors.

Gary Dirks, is
Director, Arizona State University Julie Ann Wrigley Global Institute of
Sustainability and Fron Nahzi, is Global Business Development Director,
ASU Walton Sustainability Solutions

Mobilising investment for Europe’s Energy Union, Wednesday, 26 August, 2015

AEI Updates August 2015 Posted on Sat, August 29, 2015 13:36:56

The European Commission has agreed on a package of measures designed to ensure that the European Fund for Strategic Investments (EFSI) is up and running early autumn. EFSI will be the launchpad for investment in the areas of our economy that need it most, mobilising €315 billion worth of investment over the coming years. This will be crucial for Energy Union – an ambitious project needing significant investment – and its goals to deliver secure, sustainable, competitive and affordable energy to citizens and businesses. Over €1 trillion may be needed for the energy sector by 2020.

Miguel Arias Cañete, Climate Action and Energy Commissioner said: “By 2030, we must improve our energy efficiency by at least 27%. And hopefully more, as I will work hard to go beyond the ‘at least 27% figure’. But for that to happen we need to boost energy efficiency investment in Europe. EFSI can be a driver to plug the investment gap needed in Europe’s energy transition to become the world’s most energy-efficient economy. I’m very encouraged to see that the fund is already supporting strategic energy efficiency projects, and that many more low-carbon projects are in the approval pipeline. “

EFSI: not just money

EFSI will help energy projects access long term financing. Investments in energy efficiency, renewable energy and strategic infrastructure projects, such as gas and electricity grids, will be a key priority. This is particularly relevant for the energy efficiency sector, which has been suffering from chronic underinvestment. More than €100 billion will be invested every year to achieve the 2030 energy efficiency target: €89 billion in energy efficiency measures in buildings and some €19 billion to improve energy efficiency in industry. Current investments are below half of that.

A fund proven to work

The impact of this new guarantee fund is already visible. Five out of nine already approved projects in the infrastructure field relate to energy.

In France, the Fund financed a project to promote energy efficiency in the French housing. It funded regional and local initiatives on the energy renovation of private residential buildings. By improving the insulation of the buildings involved as well as renovating their heat generation, ventilation and distribution systems, the project will cut energy bills in more than 40,000 homes.

In Denmark, EFSI backed the creation of a Renewable Energy Fund; in Spain, it gave a long-term loan to a gas grid project and lent money for R&D activities of a renewables-oriented technology company. In Finland, it financed improvements in industrial processes of a Finnish pulp mill. And that’s not all: under EFSI, project promoters will receive the technical assistance they need to successfully prepare and financially structure their investments.

The Investment Plan for Europe: Questions and Answers

Projects of Common Interest – new study on risk, Thursday, 6 August, 2015

AEI Updates August 2015 Posted on Fri, August 28, 2015 10:41:21

The EU’s ‘Projects of Common Interest’ (PCIs) – major infrastructure projects of European relevance aiming to boost Europe’s security of energy supply and competition in the energy sector – may benefit from a wide range of risk-mitigating incentives and a more fit-for-purpose regulatory treatment, a new study has found.

PCIs can involve investments in multiple countries however this can increase the risks, such as permitting delays and cost and time overruns, involved. Moreover, some PCIs are technologically challenging or very large projects, for example innovative HVDC subsea electricity cables, which can also increase the risk associated with the project.

These risks can impact the viability or the planned timeframe of the project – a situation which the Commission would like to avoid.

EU rules on major cross-border infrastructure projects state that if the risk associated with a PCI is higher than the risk associated with a similar project, then measures may be taken to ensure that the project is still completed on-time and that the risk-reward ratio stays positive for the project promoter.

The study outlines the possible categories of risk – from planning and permitting to the geographical distribution of costs and benefits – and possible technical measures, such as streamlining cooperation and increasing stakeholder participation, which could be taken to mitigate these risks.

Reducing risk would, according to the study, limit the uncertainty faced by promoters and thus reduce financing costs and encourage investments.

The Commission has drawn up a list of 248 PCIs which may benefit from financial support for the EU’s Connecting Europe Facility between 2014 and 2020. In 2014, €647 million was allocated to 34 PCIs, the majority of which involve electricity and gas transmission lines. A total of €650 million has been earmarked for PCI projects in 2015, with the second of two calls for proposal currently open.

The study

Concretization of regional projects, the Nish-Pristina-Durres and the Adriatic-Ionian highways Published on: 27 August 2015

AEI Updates August 2015 Posted on Fri, August 28, 2015 10:17:00

Prime Minister Rama held today a coordination meeting with Kosovo Prime Minister Mustafa and Serbian Prime Minister Aleksandar Vučić to discuss the importance of the construction of the Nish-Pristina-Durres highway. The meeting was attended by the leaders of the EBRD (European Bank for Reconstruction and Development) and the EIB (European Investment Bank), as well as by the Austrian Foreign Minister Kurz and Commissioner Hahn.

Prime Minister Rama noted that big infrastructure projects, whether the highway Nis-Pristina-Durres, whether the Adriatic-Ionian highway, are European projects which promote the interconnection of the Western Balkan countries. In this context, it is important that the construction of these two projects starts as soon as possible. For this reason, expertise and financial support of the European Commission and financial institutions as EBRD and EIB are needed. The construction of these two highways will increase trade exchanges in the Western Balkan region and promote tourism among these countries.

In addition to stressing the importance of the Nish-Pristina-Durres highway, Prime Minister Vučić said that thanks to this project, Belgrade will be connected to Pristina in less than three hours, while the port of Durres will become the nearest sea location for Serbia.

The feasibility study for both projects is expected to be completed at the beginning of 2016, while the EBRD and the EIB, in cooperation with the institutions of the European Union, will assist in the financing of these two highways that will link Albania with neighboring countries and the European Union.

Albania: Competitive Procedures on Technological and Economic Development Zone by Dr Lorenc Gordani | Thursday, August 27, 2015

AEI Updates August 2015 Posted on Thu, August 27, 2015 11:55:53

Albania is seeking for private sector developers
to obtain, develop and operate three fully serviced areas, located in Koplik,
Spitalla and Vlora, as newly created Technical and Economic Development Areas
(TEDAs). The GoA invites in an early stage in begin of May 2015 all the
interested developers to engage within non-binding dialogue ahead of a
potential tender process. Following above initiative, lastly, on August 26,
2015, the Ministry of Economic Development, Tourism, Trade and Entrepreneurship
announced the open of competitive procedure for the construction, development,
maintenance and operation in the Spitalla Technological and Economic
Development Zone, in Durres city.

The announcement for the launch of the competitive
procedure has been published in the international magazine Financial Times and
will be republished in the two upcoming issues on August 27 and August 28,
2015. The duration of the contract or terms of execution in years will be 99
years. In the announcement, it is specified that the bidder must submit the Bid
Security Form and the demanded value of Bid Security 15 ALL million within the October
28th, 2015.

The duration of bids’ validity is 150 days. As
regards of selection criteria for the winning bids, the selection will be made
by giving points for certain aspects of the bid, where the highest points are
100. More in detail, 50 points are given for the financial capacity and the
capability to finance the project (the business plan), 20 points for the
technical proposal for the construction of the zone, 16 points for the social impact,
8 points for the predicted deadline of investment’s finalization and 6 points
for the environmental impact.

Spitalla free economic zone is situated nearby the
Port of Durres, the biggest and the most important port in Albania, near to the
second largest city for the economic development in Albania, Durres city, only
30 away from “Mother Theresa” International Airport, 37 km from the Albanian
capital, Tirana. The zone situated in the northern part of Durres city has a
surface of 501.9 hectares.

This zone has been create with a Decision of
Council of Ministers Number 666, Date 29.07.2015 on “Announcement of the
Spitalla Technological and Economic Development Zone, Durres”. An initiative
that seeks to create world-class technical and economic development areas
(TEDAs) also in Koplik (Shkoder district, approx. 61 ha) and Vlora (Vlore
district, approx. 230 ha). As currently, envisioned, future developers will be
offered exclusive development and operator rights on these properties, through
a long-term lease.

All three areas are in close proximity to a
skilled labour force, educational institutions, and city centres with sizeable
populations. Developers and investors will benefit from Albania’s competitive,
educated and multi-lingual labour force, as well as recent reforms that have
improved the country’s business climate and competitiveness. These include
steps to strengthen the conditions for investment and improve business and
transportation linkages, especially in Europe. Then, in the end can be say that
these initiatives will make definitely Albania an exciting venue to work in the
entire region!

here communication came within the
framework of the preparation of the analytic report, about Energy Market and
Investments Opportunities in Albania and the WBs, to be release in the shortly upcoming
period by ACERC. In cases of interest to the directly cooperation as author
with analyses or for any kind of involvement or support as well as a partner,
contact us at the For more keep update with the
EU & WBs / Albania Energy Investments Updates
or visit the Official
Page of ACERC

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