ALBANIA IN COLAPSE ECONOMIC CRISIS
IMF Fears Energy Crisis in Albania Will Damage Growth
Photo: Young Albanian boys run to catch a tank departing from a road in front of the Democratic Party headquarters in central Tirana Tuesday Sept. 15, 1998. Former President Sali Berisha's supporters rioted on the Albanian capitol's streets yesterday seizing tanks from the National Guard. Two tanks were returned to the government after it threatened to use all necessary force to remove armed men from around the building. (Photo by David Brauchli)
07 08 2007 Tirana _ The IMF expressed worries on Monday that the energy crisis that has swept Albania will have adverse effects on economic growth.
“The energy crisis presents a great danger for Albania. It affects all medium-term economical indexes and could create a hole in this years budget,” it said in a press release.The drought that has engulfed the Balkans this summer has lowered Albanian reservoirs, reducing the ability of hydropower plants to generate electricity. The greater demand for water has also made it impossible for the Albanian Power Corporation, KESH, to import large quantities of electricity.
Added to that has been heavier than usual use of air conditioners, due to record temperatures.Albanians have had to deal with massive power cuts lately, sometimes lasting up to 16 hours a day.
The Albanian Central bank has expressed similar worries to the IMF, warning that continued power failures “will curb economic growth by raising the cost of production for goods and services”.
Albania’s GDP growth is projected to reach 6 per cent this year. During the last fiscal year the economy grew by 5 per cent. However, experts worry that while the first two quarters seemed to match projection in terms of growth, in the second part of the year the economy will feel the burden of the energy crises.
Albania’s power generation system hasn’t seen major investment since the early 1980s, when the cash-strapped former communist regime stopped investing in new hydropower dams.
After the fall of communism, the demand for energy grew rapidly. The power grid is estimated to need $1.6 billion in investments to eliminate power failures.
Construction of a new World Bank-funded thermal power plant is expected to start in Vlora in southern Albania at the end of this year.
KESH, which has a monopoly in the provision of electricity, is preparing a request to the national regulator for a price rise, citing the heavy cost of imports.
07 08 2007 Tirana _ The IMF expressed worries on Monday that the energy crisis that has swept Albania will have adverse effects on economic growth.
“The energy crisis presents a great danger for Albania. It affects all medium-term economical indexes and could create a hole in this years budget,” it said in a press release.The drought that has engulfed the Balkans this summer has lowered Albanian reservoirs, reducing the ability of hydropower plants to generate electricity. The greater demand for water has also made it impossible for the Albanian Power Corporation, KESH, to import large quantities of electricity.
Added to that has been heavier than usual use of air conditioners, due to record temperatures.Albanians have had to deal with massive power cuts lately, sometimes lasting up to 16 hours a day.
The Albanian Central bank has expressed similar worries to the IMF, warning that continued power failures “will curb economic growth by raising the cost of production for goods and services”.
Albania’s GDP growth is projected to reach 6 per cent this year. During the last fiscal year the economy grew by 5 per cent. However, experts worry that while the first two quarters seemed to match projection in terms of growth, in the second part of the year the economy will feel the burden of the energy crises.
Albania’s power generation system hasn’t seen major investment since the early 1980s, when the cash-strapped former communist regime stopped investing in new hydropower dams.
After the fall of communism, the demand for energy grew rapidly. The power grid is estimated to need $1.6 billion in investments to eliminate power failures.
Construction of a new World Bank-funded thermal power plant is expected to start in Vlora in southern Albania at the end of this year.
KESH, which has a monopoly in the provision of electricity, is preparing a request to the national regulator for a price rise, citing the heavy cost of imports.
