Rama: Albania to tax windfall profits of private hydropower producers

The largest operators of private hydropower plants in Albania will need to pay a windfall profit tax, Prime Minister Edi Rama revealed and stressed that the three companies are making staggering profits amid the energy crisis.

After the Ministry of Finance announced two weeks ago that it would introduce a tax on bumper profits for private electricity producers, Prime Minister Edi Rama clarified the upcoming levy is intended only for the three largest companies. Albania relies on hydropower for virtually all of its electricity output, which makes the system vulnerable to droughts. On the other hand, major projects and government measures are underway to diversify energy sources.

The lack of rain this year has crippled the state budget, as the government is shielding consumers from sky-high costs of emergency power imports. The private sector normally accounts for 40% of the country’s electricity production.

BIRN earlier reported that the Ministry of Finance estimated its planned 33% windfall tax would yield EUR 71 million. Private companies increased prices by several times this year without a rise in production costs, it added in a note to lawmakers.

At a press conference in Tirana with European Commission President Ursula von der Leyen, Prime Minister Rama said the three firms “can’t make staggering profits due to luck” and that the funds would be used to support vulnerable consumers.