Albania declared an energy emergency due to the strong rally in electricity prices and said it would allocate EUR 200 million for state-owned power distribution operator OSHEE and introduce other measures to protect households and small businesses.
In its response to the energy crisis, Albania will make sure that the supply of electricity is stable and it will protect households and small businesses from the current spike in prices, Prime Minister Edi Rama said as he presented how the government would intervene. It will establish a EUR 100 million fund for liquidity for power distribution operator OSHEE for the period until the end of the year, which will be boosted by another EUR 100 million in 2022, and offer state guarantees, he said.
Albania gets almost all of its electricity from hydropower plants, so at times of drought it is forced to import energy at higher prices
According to the emergency plan, electricity companies should suspend investments to enable uninterrupted supply and the Ministry of Finance and Economy will develop a mechanism to manage the import of electricity. Albania depends almost entirely on hydropower plants and it has no pumped storage capacity.
Rama noted the country is forced to buy energy from abroad at times of drought at higher prices than for its electricity exports.
The government will prevent the prices for households and small businesses from rising, Rama stressed. He warned the crisis is estimated to last until summer. The emergency measures should last until mid-spring, the prime minister said. He didn’t rule out the possibility to boost support in case of unforeseen events.
Protests have been held last week due to a jump in prices of food, energy and coffee
Rama compared the situation to the COVID-19 pandemic but also the November 2019 earthquake, which killed 51 people and caused significant material damage.
Several thousand people protested in Tirana last week because of the jump in prices of energy, food and coffee. They demanded from the government to abolish value-added tax on basic food items and cut taxes for electricity and oil. A rally was also held in Shkodër.
Neighboring Greece has just doubled the sum for its energy crisis fund to EUR 500 million, in anticipation of a comprehensive support framework from the European Union which is slated to be proposed this week.