The EBRD is providing further support for the development of Albania’s power sector with a new €16mn loan to state-owned power utility Korporata Elektroenergjetike Shqiptare (KESH).

The loan, guaranteed by the Republic of Albania, aims to strengthen the country’s electricity transmission network by financing the rehabilitation of six out-dated transmission substations that will also support Albania’s participation in the regional energy market in southeast Europe.

Varel Freeman, EBRD first vice-president, says infrastructure development is part of an overall series of improvements needed in the country, and the bank, working with the government, is addressing those needs.

The EBRD welcomes and continues to support government commitments to improving the power sector, which will ultimately benefit local businesses and residents, says Freeman. Furthermore this project is important in supporting the further development of the regional energy market in southeast Europe, which will be of benefit to all countries in the region, he adds.

The loan is the EBRD’s fourth to KESH and underscores the bank’s commitment to helping improve the power sector in a country which, despite progress, still faces problems to provide a reliable power supply.

Earlier loans have contributed to the upgrading of transmission and distribution networks, to the restoration of hydropower stations and to the construction of a new thermal power plant.

“The government of Albania appreciates the assistance given to support such an important strategic sector as the electricity sector,” says Ridvan Bode, the minister of finance.

The EBRD is working on this project with the World Bank which is providing a co-financing loan. The Italian government is also contributing to the investment, providing a grant of €4.6mn to finance a co-management assistance programme to KESH’s top management.