The EBRD is considering providing a €50 million long-term senior loan to the Electricity Distribution Company of Albania (“CEZ Shpërndarje”, or “the Company”) to fund the Company’s turnaround and investment programme aimed at reducing distribution losses, improving efficiency and reliability of supply, as well as improving the financial and operational performance of the entity (“the Project”). CEZ Shpërndarje is 76 per cent owned by the Czech energy group ČEZ which is acting as the Sponsor in this transaction.
The Company’s 2009-2013 investment plan will amount to €180 million and will consist of the following measures:
The Company’s 2009-2013 investment plan will amount to €180 million and will consist of the following measures:
(i) modernisation of the distribution network
(ii) refurbishment of substations
(iii) installation of new meters; and
(iv) implementation of a new billing system.
This investment programme is expected to lead to a substantial improvement in the Company’s operating performance, reduction of distribution losses from the current 34 per cent and the implementation of metering which will support improvements in payment discipline and thus enable CEZ Shpërndarje to improve the collection rates from the current 80 per cent.
The Project’s transition impact stems from three factors: (i) the demonstration effect of a successful turnaround; (ii) development of the market-led behaviour through strengthening of the institutions, law and policies that promote market mechanisms; and (iii) skill transfer to CEZ Shpërndarje from an experienced Sponsor such as ČEZ, which already operates electricity distribution networks in Bulgaria, Romania and Turkey.
CEZ Shpërndarje is the sole electricity distribution and retail company in Albania. The Company owns and operates the entire 110kV distribution network in the country, covering 69,000 km, and currently serves around 1.1 million customers. Total supplied electricity amounted to 4.1 TWh in 2009. CEZ Shpërndarje was unbundled from an integrated utility into a sep.
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