An unreliable power supply has been a major block to economic development in Albania. The state-owned power utility, Korporata Elektroenergjetike Shqiptare (KESh), has been plagued by deteriorating infrastructure, high non-payment of electrical bills, and by its over reliance on undependable hydropower that requires rainfall to work for 98 pecent of the country's electricity. The country must import electricity, and consumption has been rising while the country's capacity to supply electricity has stayed constant or declined. The result has been severe and frequent blackouts. In August, KESh cut off power to 1,200 customers who had not paid their bills.
Albania established its regulatory agency, the Electricity Regulatory Agency (ERE), in 1999, and unbundled its Transmission System Operator in 2004. The ERE does not issue a "trading license," but five companies: KESh, Darfo Albania, Kurum International, GSA and Wonder Power are licensed to import electricity. KESh is licensed to export it. Wonder Power is importing electricity for KESh this year. In May, the Albanian minister of economy, trade and energy said the country plans to privatize KESh within the next two years.
Albania has difficulty with having enough transmission capacity between its neighbors. During the past winter, capacity between its borders was booked and the country could not find enough traders with both power and access to the transmission lines.
Much of Albania's funding for energy has come from donations from the World Bank, the European Bank for Reconstruction and Development, and other nations. The EBRD gave Albania its fourth loan in October. This one, worth �16 million ($20.15 million), will go toward upgrading six old transmission substations.
| NET ELECTRICITY EXPORTER | 479 GWh | | Total Electrical Consumption (2004) | 5,847 GWh | | Total Electrical Production (2004) | 5,368 GWh | | Electrical Consumption per Capita (2002) | 1427.00 kWh/capita | | Average Household Electricity Price (2005) | ¢5.95/kWh |