Albania: Gov investigation over HPPs Bistrica 1&2 privatization by Turkish Kurum International

4. April 2016. / SEE Energy News

HPP “Bistrica 1” and “Bistrica 2” were sold in May 2013, in the amount of 100% of capital, to the Turkish company “Kurum International”. The value of sales was 52 million euro. During 1999-2011 Albanian state invested in HPPs full rehabilitation around 21 million euros. Although today these two HPPs have been privatized, state controlled energy corporation KESH is repaying the loans for the earlier rehabilitation. Loan payments will continue until 2044.

The process of selling the “HEC Bistrica 1 and 2” were launched based on Gov decisions no. 152 and 153, the Council of Ministers dated 29.02.2012. The purchase contract was concluded on 21 May 2013 and the agreement on purchase of 100% of the shares of these companies was signed between the Ministry of Economy, Trade and Energy, as the owner and the company “Kurum International”, as the winner.

Both HPPs, “Bistrica 1” and “Bistrica 2” are fully rehabilitated under the project “Power supply BISABU South Albania”, which began June 24, 1999 and ended December 31, 2011. More specifically, investments included rehabilitation of hydro mechanical equipment and ancillary installations, civil works, rehabilitation of distribution facilities, electrical equipment rehabilitation and modernization including new control system-monitoring.

The total value of the project “Power supply BISABU South Albania” “, financed by the German bank” KfW Bankengruppe “is about 33.2 million. Of this funding, 21 million euros were used for the complete rehabilitation of HPP “Bistrica 1 and 2”, while the difference for other investments in the energy sector. The loan repayment period to 33 million euro payment plan launched July 31, 2007 and ending on December 30, 2044.

So far KESH has paid around 10 million euro principal dept and interest of approximately 2.2 million euro. At the end of the period of repayment of this loan, with dt.30.12.2044 provided that KESH repay all, the sum of EUR 2.6 million for interests and principal outstanding of approximately 23.7 million.

KESH confirmed that it continues to pay the loan taken for the rehabilitation of the HPPs . KESH stated also that as from the moment of transfer of ownership to “Kurum International” it has no information on the production of these HPPs or energy trading.

In this regard, Deputy Minister of Industry and Energy, Ilir Bejtja, states that following a detailed audit, filing a detailed study of the privatization of HPPs, not only “Bistrica 1 and 2”, but also that of Shkopeti and Koman, the prosecution case was passed.

According to the audit conducted by the Ministry of Energy, HPP “Bistrica 1 and 2″ it turns out not to be worth the adjustment in the sale price. Audit recommendation would include the value of the investment carried out by the Albanian state, only two years before the sale. In these conditions, the Ministry of Energy and Industry, in fulfillment of legal obligations provided by article 281 of the Criminal Procedure Code, asked the prosecution registration of criminal proceedings against citizens Florjon Mima and Enno Bozdo for committing offenses ” abuse of power “, in collaboration, provided by Articles 248 and 25 of the Penal Code.

However, this audit lasted more than two years. According to Deputy / Minister that due to the volume of files, and the fact that all the documentation was not in the state, but a private entity. According to him, the opposition of contracts awarded by the state to private businessmen, have a timeframe of about three years. He stressed that they are working closely with the prosecutor, once it thought that the damage could be greater. “If you calculate the profit of the investment made by the state that would return in about 15-17 years ahead then, the damage amounts to around 110 million euro, only for Bistrica.”

“Kurum International” has not responded to media interest to local media reports who requested information on the hydropower production after sales and investments made by the company in this work after purchase, transmits Serbia-energy.eu

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