USAID/Albania Activities: Economic Growth : Energy_Sector_Restructuring

Duration: September 2000-September 2008

Partners: Pierce Atwood
               Hunton & Williams
               United States Energy Association
               National Association of Regulatory Utility Commissioners

Geographic Focus: National

Description:
The Albanian power system relies on hydro-power more than 95% of its electricity generation and therefore depends highly on the level of rainfall. Lack of investment in new generation facilities, poor maintenance of existing facilities, and limited capacity for energy imports has significantly reduced energy supply in Albania at the same time that demand is growing. These problems are compounded by weak institutional capacity to effect necessary reforms of the energy sector and inefficient management of the state-owned Albanian Power Corporation (KESH). As a result, Albania continues to face serious energy crises that threaten the sustainability of its economic growth. In fact, the lack of a reliable and affordable supply of electricity has been one of the factors that impede the growth of Albanian enterprises and discourages domestic and foreign investments.

USAID’s energy program provides technical assistance and training to support the implementation of the national energy strategy, which aims to stimulate sustainable economic growth and investment by improving the availability, efficiency and reliability of energy supply at reasonable cost. During 2006, USAID focused on strengthening the capacity of Energy Regulatory Entity to function as an independent and transparent energy regulatory body, and assisting the government to develop a legal framework for the establishment of an open and efficient energy market. USAID also assisted KESH to develop the financial and operational management capacities to become an effective participant in the Energy Community for the South East Europe (ECSEE) and implement the unbundling of its generation, transmission, and distribution assets into independent, stand-alone companies. The future assistance will be focused more toward privatization of the distribution branch of KESH and implementation of the Energy Market Model.