The Power Recovery Project

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The Power Recovery Project of Albania has an objective to improve reliability of power supply and financial viability of the power sector. This proposed project consists of four components: i) short-term complementary power import support; ii) upgrading distribution infrastructure, iii) transmission meter/data center upgrade; and iv) supporting power sector reforms and project implementation. The first component will support KESh/WPS with up to US$ 30 million to purchase short term complementary power imports to meet KESh/WPS’ power supply obligations. The second component will support GoA’s and Distribution Company’s plan to reduce distribution losses, improve cash collection and reliability of power supply. Component three will support OST to: i) providing power meters and upgrading a data center; and, ii)supplying and installing an IT system for the data center and providing technical assistance for developing procedures for the establishment of a market platform for independent power producers and some eligible customers, among others. Finally, component four will support priority power sector reforms to facilitate the recovery of the power sector and improve the performance of the distribution company through provision of management and technical advisory services. The Project draws extensively upon the lessons learned from similar World Bank engagements worldwide and in Albania. The following key lessons have been reflected in the project design; (i) the need for upfront political commitment, and will, in enforcing payment discipline and penalization, under the existing judicial framework, of electricity theft; (ii) complementing project design and monitoring around higher policy actions through the DPL series, focusing on structural changes in the sector; (ii) designing implementation and monitoring of social outreach programs targeting electricity consumers and key stakeholders; (iii) coordination with inter-ministerial task forces responsible for supporting the loss reduction program and ongoing IFIs/donor support programs; and (iv) strong analytical diagnosis underpinning the operation. Still, heavy upfront implementation preparation and supervision of this operation will be required, together with periodic interaction with donors and IFIs involved in the sector.