Ashta Hydro Power Project

active

Enerji Ashta was developing the Ashta Hydro Power Project, a 48 MW hydro power plant on the river Drin. The greenfield project was structured on a build, operate and transfer (BOT) basis for 35 years. Under the contract, the power distribution company Korporata Elektroenergjetike Shqiptare, KESH, was to buy the plant's entire production for the first 15 years of its operation at a price of EUR59/MWh. After that, the project operator was either to extend the power purchase agreement or sell the electricity on a merchant basis. The total project cost was reported to be EUR166 million (US$ 244 million) at the time of contractual closure in September 2008. The BOT contract was signed by the Albanian Minister of Economy, Trade and Energy and a member of Verbund’s management board. IFC advised the Albanian government on the preparation and structuring of the transaction, as well as on the design of the legislative framework governing PPPs in Albania. The contract was awarded by way of a competitive tender, which was prepared by the Albanian government and officially published on Jan. 18, 2008. The government received two bids, one from a consortium of GDF SUEZ [France] and Compagnie Nationale du Rhone [France], and a second from Verbund [Austria]. The bids were evaluated on the proposed level of investment, the installed capacity, technical standards and the length of the construction period. The project received environmental approval from the Albanian government in April 2009. The project reached financial closure in December 2009, when it was announced that the construction contractor, Porr [Austria], had won a EUR60 million (US$83 million) construction contract for the project. Previously, in September 2009, Energji Ashta placed a EUR100 million (US$139 million) equipment supply order with Andritz Group [Austria]. Construction commenced in March 2010 and was due to be completed in 2012. On April 20, 2010, Verbund and EVN signed a joint venture contract, giving EVN a 50% share in the project company, Enerji Ashta. In March 2010, Verbund announced that it would increase the capacity of its Albanian hydropower plant from 48 to 57 MW, increasing its investment from 166 to 200 million euros (US$272.7 million). In September 2012, the project's first section was commissioned. In February, 2012, MIGA issued a guarantee totaling €121.4 million ($159.4 million) to EVN AG (Austria). The 20 year guarantee coverage is for its equity investment, and up to 10 years on its loan guarantee. Coverage includes: risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract. http://www.miga.org/projects/index.cfm?pid=1052