Speech of Prime Minister Edi Rama at the 13th Ministerial Council of the Energy Community in Tirana:
Thank you for being here in Tirana, after Albania’s successful presidency in the Energy Community, about which the Commission stated in 2011 that: “The Energy Community is focused on investments, economic development, security of energy supply and social stability “.
But more than these, the Energy Community is also about solidarity, mutual trust and peace.
The truth is that Albania took the rotating presidency of the Energy Community in a very dramatic situation for the energy sector in the country. Our government inherited an energy sector on the verge of bankruptcy, with a financial situation without liquidity, which poses a real threat, not only to the sector itself, but to the country’s finances as well.
The Power Distribution Company, which in 2007 started its journey with clean books, by August 2013 had 1 billion dollars debt. 52% loss due to theft and an overused network, 85% of which is over 40 years old.
Today, we have a reversed situation upside because, if before the government had to inject every year 150 million Euros to ensure continuity of supply, this sector produces 130 million dollars of income annually, and injections of survival from the state budget are no more needed. Suffice it to recall that over 300 thousand customers signed contracts to access the system, after a multi-year period during which they received power out of the system, either by stealing or by refusing to pay debts.
In addition to big debts in the energy sector, we faced since the very beginning with a mountain of hidden and unstated debts that the previous government had to the contractors of public works or public services, from drugs to hospitals, banks, schools, which amounted to 720 million dollar.
The vital necessity to initiate a new program from the International Monetary Fund was inextricably linked with the commitment of the Albanian government to undertake the long-delayed reform of the energy sector, as the main link of a chain of reforms deferred over the years. For instance, the reform on pensions, which had created catastrophic deficits and had become and openly threatening for the near future.
Even the World Bank, before undertaking, thanks to the reforms, the opening of a new program, which is the largest program of support for Albania with 1.2 billion dollars, clearly determined that everything depended on what we would do with energy.
In addition, I would emphasize, that the company’s distribution of energy was not only on the verge of a total collapse, causing a thorough blackout for the country, but it was also in terms of an open conflict between the state and private owners of the company who were forcibly drivenout of Albania by the police. From January 2013 through August 2013, the Government imposed an administrator in a private property, but no step was taken to return property. Albania was facing another threat, a battle, another Waterloo in the international arbitration, because another unaffordable debtfor the state’s finance was being added to the mountain of financial problems due to accumulated debt.
I am very grateful to the Energy Community, which at a critical and difficult moment for the country became our vital support, in a transformative process for a reform concerning a large area, where thanks to the Energy Community, its technical and moral support, we reached the agreement with the company, thus avoiding confrontation in an arbitration, that would have been the Waterloo of Albaia and Albanian finances, just as legal consultants engaged by the government had mad clear that there was no chance win.
Today, the situation is reversed. I want to emphasize above all that this has been the most difficult reform of this period, but it was also the most supported reform by the Albanian people. Strange as it may seem to those who see reforms as key moments to invest the political capital, with the risk of losing a substantial part of the capital, this reform has increased the political capital of the Albanian government, and has increased public confidence in a process, which of course still has to ensure a healthy relation between customers and service providers.
For the first time after a period that is immeasurable in time, we have begun to invest in the energy sector and specifically in the distribution sector, revenue from the company itself, and it was unimaginable two years ago.
Just as this reform has increased enormously the credibility of financial organizations, and now the company is facing the biggest challenge of modernization of the distribution system and customer care modernization.
But for the sake of truth, we must say that this would not have been possible without the support of the Energy Community. I am so grateful to all those in Vienna who provided the ideal environment and the best support from a technical standpoint and helped us reaching an agreement of which we are proud today, because we have created the basis of a success story. Of the 52% loss, which were compensated with much less infrastructure, less hospitals, less schools, less gardens and nursery school, less public investment to fill the hollow of thefts and losses, in September loss was reduced to an impressive 25.3%. The lowest figures in the history of losses of power distribution.
On the other hand, we have started a comprehensive legislation reform, for a new legal framework that does not simply end with the electricity sector, but extends also to the natural gas sector in line with the third legislative package. This week the parliament will pass a law on energy efficiency. This as well is due to cooperation with the Energy Community in Vienna. Meanwhile, this is the first time that Albania has a national development plan for the sector, including the national plan on renewable energy for whose adoption the necessary procedures have already been initiated. In additon, we are working intensively for ammendments to the law on renewable energy, which is the final part of the legislative reform in this sector.
We are proud, because two years ago we were last in the region not only as far as legislative basis and the lack of reform in the sector are concerned, but we were also on the brink of an abyss that would have had incalculable consequences.
Today, Albania is the leading country in the region for reforms in the energy sector, and I am fully convinced that these reforms are essential to guarantee improvements in the near, short-term and medium-term future, in addition to having a great impact on the quality of service and on the quality of the sector as a whole.
Ajo që dua të nënvizoj është se për ne, sot është më e qartë se dje, që çështja e energjisë nuk është një çështje e socialistëve, e demokratëve, e republikanëve apo e të pavarurve, por është një çështje kombëtare, me dobi kombëtare. Puna e bërë nga kjo qeveri shkon përtej dobisë politike dhe duhet të jetë një pikë referimi për të gjithë, pasi mjaft të përmendim zhvillimin kaotik, të paqëndrueshëm dhe me pasoja të sektorit të prodhimit të energjisë, ku Shqipëria u katandis realisht në një “case study” për mënyrën sesi një vend mund t’i shpërdorojë potencialet e veta të mëdha hidroenergjetike, duke krijuar me duart e veta premisat e një xhungle, ku të gjithë të dilnin të humbur, në një vend sot që ka hedhur themele të sigurta për të ardhmen e sektorit.
Under the Presidency, we have done our duty and have supported every regional initiative, both in terms of security of energy supply, but also for the development of initiatives to create a regional market as part of the European market. My government is very clear on the fact that if we succeed in creating a common regional power market, taking advantage of the specific potentials of each country, and harmonize the use of resources, in not a very distant future we will be in a situation the mutual benefits of which are hard to imagine today for many people.
The Balkans have a great potential and a diversity of sources of energy production which, if used separately, are more expensive and are obviously much less advantageous for each of our people, but if used together they have lower costs and far greater advantages for each of the peoples of the region.
By making an important step to transform the energy sector in an open market, by removing tariff blocks, by organizing the launch of a completely new market, as well as by preparing the tariffs of access to the network, we have created the premise of an example of success, and if we embrace it regionally, it will give us extraordinary benefits in the medium term.
The existence of the Energy Community, only 10 years after the end of the bloodshed in the Balkans, is an excellent example on which we will continue to build. It is an example of how regional cooperation and coordination of strategic agendas on issues concerning everybody, and on issues where everyone has the opportunity to gain more by cooperating with one another, is is at the same time a very inspiring example for economy.
Albania has supported all initiatives to reform the Energy Community, according to the proposal of the high reflection group, which is mandated to assess the institutional structure and working methods of the Energy Community for achievening the objectives of the Treaty.
In addition, we support also the expansion of the activities of the CAO’s office. The initiative of Turkey’s participation in this office for auctions of the Turkey-Greece border, which starting next year will be on an annual and then monthly basis, has created the ground for Albania as well to strongly support the organization of this process also in other borders, such as Greece and Kosovo, which will now be a separate check-in area.
Nord Pool Spot, which has been licensed by the water-energy resources of the Norwegian Directorate to organize and operate in a country for trade power, and by the Norwegian Ministry of Petroleum and Energy to facilitate the energy market in foreign countries, is a very special asset. With the help of Nord Pool’s we have started developping the idea of creating a PX, noting that in the countries of our region, with a small individual market, it is necessary to organize regionally and operate regionally, in order to increase generation evidence and to reduce costs in the interest of consumers.
We are absolutely open and will continue to be active through the example in the Energy Community, by supporting every initiative for increased investments in the region. Even the Vienna Summit, where actually the energy sector received the most concrete support, was a clear indication that if we work regionally, not only we will increase the benefits for each of our peoples, but we will be an added value for Europe itself in this sector.
We are making every effort to maximize the capacity of interconnection and to serve as a central hub in support of an open, competitive regional market, without giving up on other investments, such as the very first of the interconnection line between Italy and Albania, as part of the expansion of the regional market to a wider market.
Any initiative taken in this context makes us enthusiastic, hoping that our contribution to the rotating Presidency has been fruitful.
If it is true what the saying goes that at the end of the tunnel there is always light, it is certain that the Energy Community is a tool that ensures that everyone who has the vision, courage and determination to find the light at the end of the tunnel, the light will be there. And I am convinced that walking on the rails of the philosophy on which the Energy Community was built, which is the creation of integrated power markets, based on the foundation of mutual interest and mutual trust and peace, we will be in a much shorter time than we can imagine today, in such a situation that we weill look as prehistory the difficult years of transition.
Sustainable development is not possible without sustainable energy development. It is an axiom, and we have touched its authenticity from the first day that we undertook this historic reform, and we must continue seeking its authenticity together in order to ensure sustainable development across the region.
We are too small to remain divided and to fight based on our divisions. But we can be very valuable for ourselves and for each other, if we join spaces, markets, forces and create as soon as possible, what is our obligation to our children, to other generations: a common area of sustainable development, which has at its core sustainable energy development.
Once again, thank you very much for your presence in Tirana. Thanks to those who have come here for the second, third, fourth time, and I thank all those who have come for the first time, while ensuring them that Albania is always difficult for the first time, but it is a pleasure to be back the other times. In the eyes of foreigners Albania is like the forbidden apple which you are not allowed to bite, but once you’ve bitten it, you want more of it.
Thank you!
