EVN, Statkraft to build three Albania projects totaling 340 MW

Austrian utility EVN and Norway’s Statkraft have signed a 950 million euro (US$1.37 billion) agreement with Albania to build three hydroelectric plants in Albania’s Devoll River Valley totaling 340 MW.

EVN and Statkraft each have a 50 percent share in the venture to build three peak-load hydro plants over eight years. Called the biggest proposed hydropower project in Europe, the plants are to generate about 1,000 gigawatt-hours (GWh) annually.

“The unique size and complexity of the Devoll hydropower project, the biggest ever investment in Albania and currently the biggest hydropower project in Europe, justified our enormous efforts,” EVN Chief Executive Officer Burkhard Hofer said prior to signing December 19 with Albanian Prime Minister Sali Berisha.

The companies have been negotiating a contract with Albania since January, when they won a build-operate-transfer concession for 35 years, or until the project reaches 59,000 GWh, to exploit the whole potential of the Devoll Valley. (HNN 10/1/08)

“We are going ahead with these projects despite the current financial crisis and to do this now is also a very strong expression of confidence in Albania,” Hofer said.

The government found in July 2007 that a plan by EVN to develop the three hydro plants was in the public interest, giving EVN an advantage in bidding for Devoll River water usage rights. The government finding gave EVN a bonus of 10 evaluation points, from a possible 100, in advance of the open international tender for the development of hydropower on the Devoll.

While 12 Albanian and foreign companies expressed interest in the tendering, it was reported only two submitted bids, EVN and Landsvirkjun &Kurum Holding.

Ragnvald Naero, Statkraft’s executive vice president, said the project could increase the hydropower production of Albania by 20 percent, and would create jobs and stimulate the economy.

“Devoll gives Statkraft a foothold in one of the fastest growing markets for hydropower in Europe, a market that is increasingly interlinked with the rest of the European energy market and the European Union, supported by the European Energy Treaty,” Naero said.

He added that Albania, Austria, and Norway are all hydropower nations. The Devoll hydropower project is the second to start here this year, 30 years after the last hydropower station was built in Albania under communism, which was toppled in 1990.

One of the three plants in the project is a partially constructed hydropower station in Banja, which was abandoned at the end of the communist regime. Another plant will be built at Lozhane-Grabove and the third one at Skanderbegas.

EVN and Austrian utility Verbund signed a concession agreement in September to build the 48-MW Ashta hydropower plant on Albania’s Drin River in Shkoder District. That 160 million euro (US$229.6 million) investment is for a run-of-river hydropower plant to be built south of Shkoder, making it the fourth hydro plant on the Drin, but the first to be built in more than 30 years.

Currently, the three hydropower stations on the Drin River supply 95 percent of Albania’s power. However, they have not been able to meet the growth in demand, resulting in power shortages.

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