Albania has been facing a major electricity crisis since the summer of 2000
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Albania has been facing a major electricity crisis since the summer of 2000. The crisis has mostly been caused by the huge demand for electricity resulting from the failure to stop the illegal use of electricity and the nonpayment of bills.
Thanks to the implementation of a Power Sector Action Plan agreed by the Government with the donors, however, the country has been making progress since the beginning of 2001 in addressing these issues.
The World Bank's assistance to the power sector in Albania has so far focused on sector reforms and improvement of sartorial capacities. The ‘Power Sector Rehabilitation and Restructuring’ project, since closed, has significantly improved the operational effectiveness of the power sector by implementing measures to reduce the loss of electricity, introducing electricity price rationalization, and initiating a regulatoryand restructuring framework for the sector.
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Losses reduce and revenues double
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Since the implementation of this project, losses have gone down every year starting from 2001. Revenues collected have doubled in 2 years.
These results were achieved through the provision of secure boxes with meters that were installed in single family homesas well as in apartment buildings.
The World Bank has recently agreed with the Albanian Government and the Albania Power Corporation (KESH) to finance the US$ 25 million Power Sector Generation And Restructuring project.
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This project follows four others which have been under operation since 1995 and aims at increasing Albania’s electricity supply and improving the balance between hydropower and thermal power production.
Now, the World Bank's assistance to the power sector in Albania has shifted focus to improving the security of the electricity supply, thereby helping Albania to rejoin the Union for the Coordination of Transmission of Electricity (UCTE) and hopefully to be active in the South East Europe regional energy market (SEEREM).
Studies about the Energy Sector in Albania show a total demand for generation rising modestly from 6,144 GWh in 2002 to 6,400 GWh in 2005 in the medium term. This apparent growth in demand by different sectors of Albania's economy show how important these projects are for revitalizing the economy and giving a new impetus to domestic businesses. These benefits would in turn provide a more favorable environment for potential foreign investment in Albania and improve the country's economic growth prospects.
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