Tuesday, November 13, 2012

World Bank says CEZ could quit Albania in months

* World Bank says CEZ and govt are looking at an exit
* Says both sides failed to make privatisation work
* World Bank working on emergency $100 mln loan to Albania
By Benet Koleka
TIRANA, Nov 1 (Reuters) - Czech utility CEZ could walk out of Albania in the next few months after it failed to turn around its power distribution monopoly there, the World Bank said on Thursday.
Jane Armitage, the World Bank's director for Southeast Europe, said the CEZ Shperndarje distribution monopoly and the government no longer trusted each other, had engaged lawyers and it seemed that both sides were "looking at an exit".
"There have been a lot of efforts to try and get an agreement between CEZ and the government and I think at this point it is a divorce that is on the cards in the next few months," Armitage told reporters.
She was speaking at her farewell conference in Tirana a day after CEZ board member Tomas Pleskac said his company may decide to pull out of Albania by the end of this year if it cannot resolve its disputes with Albania over power imports and prices.
Reviewing CEZ Shperndarje's three-year performance, Armitage blamed both CEZ's inability to reduce technical and commercial losses and the refusal of government agencies and consumers to pay their power bills and accept tariff increases.
CEZ is the Czech Republic's most profitable company and expects to earn 41 billion Czech crowns ($2.13 billion) in net profit this year. In the first half, CEZ's Albanian unit posted a 2.3 billion crowns ($119.35 million) EBITDA (earnings before interest, tax, depreciation and amortisation) loss.
Pleskac said CEZ has prepared documentation to activate a 60 million euros ($77.9 million) guarantee it received from the World Bank when it bought the Albanian OSSH power distributor.
"I really think we should leave it to lawyers to work out exactly whether the partial risk guarantee should be called," Armitage said.
CEZ's failure to import its quota of electricity put a strain on public finances after the government authorised a 50 million euro ($64.7 million) loan to the power producer monopoly KESH for imports.
Armitage said the World Bank would support the government in the next few months to finance electricity imports and also to continue reforms to put the sector on a sustainable basis.
"That is the top priority for us. We are working on a 100 million dollar loan to the country for the energy sector," Armitage added.

No comments: