The wrong way to grant a hydropower plant with a concession

By Gjergj Erebara / BIRN

The current government has so far launched two concession procedures for large hydropower plants, both following the same flawed procedures of the previous government, only this time, with even less transparency.

Koman hydroelectric dam. (c) G. Erebara/BIRN

In 2003, the World Bank conducted a study on the potential of hydropower generation in Albania. The study concluded that about two-thirds of the country’s theoretical hydropower potential was not utilized and that Albania could significantly increase hydropower production by building new hydropower plants or redesigning existing hydropower plants.

In 2007, the government of the day passed a new law on concessions, through which, in theory, a private company had the right to identify a business opportunity using a public asset and present this idea to the government. The government gives the initial idea a bonus in a public competition where other companies can also participate.

The concessions law of that time came as a reaction to the practices of the previous socialist government, which decided to grant concessions to whoever asked for it. So the concept of ‘competition’ and the concept of ‘public asset’ were established. In practice, the previous government’s implementation of the law turned the concept of ‘race’ into a farce. Concessions were given in the vast majority of cases to the companies that requested them, while the competition did not change anything. In total, the previous government granted concessions to several hundred small and medium hydropower plants.

The Socialist Party, at that time in opposition, often criticized these concessions. For example: in August 2010, deputy Erjon Braçe, in the role of the vice-president of the socialist parliamentary group, stated that: “The process of granting concessions to national assets is deeply non-transparent, so we demand the immediate publication of any contract related to this process, in order to clearly see the beneficiaries, values, obligations and their fulfillment based on the law”. According to Braçe, the model of the previous government was “pay the prime minister and get what you want”.

The full article published by can be found here (in Albanian).

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