Albania: Albania Hydros-01/Tirana

Date Filed
14 Jan 2013
Status
Closed
Phase
Compliance
Country
Albania

Case Tracker

Eligibility
Eligibility
Assessment
Transferred
Assessment
Dispute Resolution
Compliance
Appraisal
Closed
CURRENT Status
Appraisal (COMPLIANCE)
Closed

Complaint Overview

Complainant

EDEN Center for Development Education and Networking

Concerns

Social & environmental impacts of privatization.

Cross-Cutting Issues
Risk Management Resource Efficiency Water Women Access to Information Policy

Project Information

Region
Europe & Central Asia
Institution
IFC
Name & Number
Albania Hydros 583387
Company
Government of Albania
Sector
Advisory Services
Department
Environment, Social and Governance
Category
n/a
Commitment

N/A

Synopsis

Complaint

As per IFC, the Government of Albania (Government) seeks to liberalize its energy sector so as to enhance private sector participation and to monetize/realize the value of its generation assets. IFC has been appointed by the Government on the privatization of a series of hydropower plants (HPPs): 1) Ulza HPP and Shkopeti HPP on River Mat; 2) Bistrica I HPP and Bistrica II HPP on River Bistrica; and 3) Lanabregas HPP.  IFC is assisting the Government to maximize privatization proceeds from the sale of the HPPs and also to ensure the plants are rehabilitated and efficiently operated by the new owner so as to improve the country’s generation system. IFC is managing roughly $820,000 in trust funds for the project.

In January 2013, a complaint was filed with CAO by the Environmental Center for Development Education and Networking (EDEN) in Albania. The complaint raises specific concerns about perceived resultant impacts of privatization of the formerly Government-operated hydropower plants. It is claimed that the privatization will potentially lead to a reduced pool of energy for direct disposal to the national electricity utility, Korporata Electroenergjetika Shqiptare (KESH) and subsequently force KESH to start buying energy on the global market to meet consumers’ demand. The resultant impacts of the privatization project cited in the complaint include, but are not limited to: continued energy shortages and blackouts; an inevitable rise in electricity tariffs for consumers; and negative environmental impact of the operations of the private steel company, which they believe has now acquired the HPPs.  Furthermore, the complainants argue that IFC’s due diligence of the Advisory Services project is flawed. They are of the opinion that IFC did not conduct appropriate social and environmental impact assessments of the project and the process(s) lacked transparency.

CAO Action

CAO found the complaint eligible for further assessment in January 2013 and conducted an assessment of the complaint with the relevant parties.  Having finalized the assessment, CAO confirmed that the Complainant wished to trigger CAO’s compliance function in addressing the complaint.  This decision was made with a clear understanding of both options available, and having due regard to the current political climate in Albania.  CAO's Assessment Report is available at the links below in English and Albanian and provides an overview of the assessment process, including a description of the project, the complaint and the assessment methodology. 

CAO completed the appraisal in March 2014.  Having considered available information on the potential adverse environmental and social impact of the project in light of the issues raised by the complainant and the application of relevant IFC policies, standards and procedures, CAO finds that this complaint does not warrant further investigation. As such, CAO has decided to close the case.

Status

CAO closed the case on March 18, 2014. CAO's Appraisal Report and Assessment Report are available under 'View Documents' below.

Updated: March 24, 2014

Case Documents

  • Dispute Resolution

    Complaint
    Complaint
    Jan 14, 2013
    English
    Complaint
    Assessment Report(s)
    CAO Assessment Report
    Apr 01, 2013
    English
    CAO Assessment Report
    CAO Assessment Report
    Apr 01, 2013
    Albanian
    CAO Assessment Report
    IFC Management Response to CAO's Assessment
    May 07, 2013
    English
    IFC Management Response to CAO's Assessment
  • Appraisal Report(s)
    CAO Compliance Appraisal of IFC advisory service
    Mar 18, 2014
    English
    CAO Compliance Appraisal of IFC advisory service