Albania is located in south-western part ofBalkans peninsula, Southeast Europe.The country is linked with the rest of theworld via land, sea and air routes.

Characterized by a distinct mountainous landscape,the average altitude of Albania is 700 meters above the sea. Based on the structure, composition andshape of the landscape, four physical-geographic zones are distinguished: Alps, Central MountainousRegion, Southern Mountainous Region and WesternLowland. The highest peaks are those in the Alpsand the Eastern Mountains (Korabi 2751 m) andthe lowest peaks are located in the western coastarea.The landscape is intersected by the valleys ofVjosa, Devoll, Osum, Shkumbin, Erzen, Mat andDrin rivers, eastward and westward, which enablethe connection of Adriatic Sea with the internal partof the country and the BalkansAlbania lies in the Mediterranean climatic zone,characterized by a hot dry summer, strong sunshineand generally mild winter with abundant rainfalls.Annual average rainfall is 1430 mm.Situated along the Adriatic and Ionian sea coast,Albania constitute one of the key points ofintersection for the roads crossing the WesternMediterranean into the Balkans and Little Asia.Albania ensures via sea route the connection withother world countries and that of the central regionsof the Balkans Peninsula with the Adriatic coast. TheAdriatic Sea and Otranto Strait stand in-between Albania and Italy.

Albania is a Parliamentary Republic .The two main ports are located in Durres and Vlora. Mother Theresa Civil Airport is based in Rinas, 25km from the capital city.

The Capital City of Albania is Tirana since 1920, withan estimate population of 1,000,000 inhabitants.Tirana is also the major administrative commercialcentre of the country.

Official language is Albanian.

Borders: The border via land is 720 km long, 287 kmout of which are shared with Serbia, Montenegroand the Republic of Kosovo in north and northwest of the country, 151 km east with the Republic ofMacedonia and 282 km south and southeast with Greece. The coastline of the country is 362 km long.

Population: about 3,5 million inhabitants (source:INSTAT). Albania is estimated to be a country with arelatively young population.


Albanian hydrographical territory is 44.000 km2 or 57% larger than its geographical territory.The country has eight main rivers: Drini, Buna, Vjosa, Semani, Mati, Shkumbini, Ishmiand Erzeni. The average altitude of the hydrographical territory is about 700 m above thesea level. The total average flow of the rivers is about 1245 m3/sec.Due to the morphological features, Albania is quite rich in rivers, with more than 152 riversand torrents forming eight big rivers. They have a southeast-northwest flow, mainly orientedtowards the Adriatic coastThe most important rivers are Drini with 340 m3/sec, Vjosa with 210 m3/sec, Seman with101 m3/sec, Mat with 74 m3/sec, Shkumbin with 60 m3/sec, etcAlthough with small flows, their considerable cascade makes these rivers substantiallyimportant for the hydropower potential offered to the country.Consequently, Albania is seen as a country rich in water reserves and a hydropower potentialthat bears an important developmental role.

Albania Hydropower PotentialTable 1. The main hydrologic characteristics of big rivers

Hydropower Potential

Albania has big hydroenergetic potential and only 33% out of it is used so far. The country has a total installed capacity of 1461 MW and marks an average hydropower production of5267 GWh. Albanian Hydroenergetic potential is approximately 600.000 KWh per sq2 andthe electric power production could reach up to 17 TWh.

Albania Big Hydropower Plants


Big Hydropower Plants

Three rivers are actually exploited in Albania ina cascade form. The hydropower plants builton each cascade operate with the followingparameters:

• Drin river cascade, with a total installed capacity of 1350 MW, which constitutes92% of the country’s power generation with three hydro-power plants;

• Mat river cascade, with two hydro-powerplants operating on a total installedcapacity of 49 MW,

• Bistrica river cascade, with a total installed capacity of 27,5 MW.


Table 2. Big scale Hydro Power Plants constructed in Albania.







Table 2. Big scale Hydro Power Plants constructed in Albania.

Free areas for investments

The hydrographic territory of Albania is divided in catchment basins as by the main rivers .Actually, after the reconstruction of hydroenergetic objects given in concession results thatfree areas for possible investments in hydroeneregtic field remain Osumi catchment Basin,Vjosa and a branch of Drini river.These rivers are located in a vast territory of Albania and have a big hydroeneregticpotential. In these areas, with a high hydro-energetic potential, exist free zones for smallHPPs construction.


Energy Development in Albania

Due to a long five-century ottomanoccupation and other historical conditions,the declaration of independence, onNovember 28, 1912, Albania was abackward agrarian country, lacking anyindustry whatsoever. Even during KingZog period, Albania followed its track asan agrarian country, without any signs ofenergy development. During 1945-1951 thepower production amounted to an averageof 10 KWh per resident.The hydropower sector began to developafter 1952, when Selita hydro-power plantstarted operation, with an installed capacityof 5000 KW. In 1958, Ulza hydropower plantstarted functioning with installed capacityof 25.000 KW.Following the construction of other threehydropower plants of Shkopet, Bistrica Iand Bistrica II, as well as of Fier thermalpowerplant, in 1970, power productionreached 500 KWh per resident.In 1971, 1978 and 1985, three of thebiggest hydropower plants of the country,Vau i Dejës HPP ( with installed powerof 250 MW), Fierza HPP (with installedpower of 500 MW) and Koman HPP withinstalled power of 600 MW). Other 90 smallhydropower plants were constructed duringthis period.No further developments of the sector havebeen marked from 1985 to 2007.Most of SHPPs were neglected and about20 of them were completly destroyed.Considering the current power-supplysituation, as well as the potential demandfor power, the Government has set thedevelopment of the energy sector amongits priorities, focusing on the developmentof renewable energy resources and, inparticular, the hydro-power ones.

Small Hydropower Plants

Albania counts 70 small existing hydropowerplants with a ranging capacity from20 KW to 9200 KW. Only 38 out of this totalare currently operational, whereas the restis out of function.The most part of machineries and HPP’sequipments are Austrian, German, Chinese,Hungarian and talian productions. Someparts of them are produced in Albania. Theturbines are of Frencis, Pelton and Banky types. The generator type is Sincron witha low voltage. The average age of theseHPPs is approximately 25 years.Out of the total of small hydropowerplants:

• 32 of them operate on concessionarycontracts, with an installed capacity of 24,4 MW

• 16 of them have been privatized andoperate with an installed capacityof 2,047 MW

• 22 of them are owned by the State withan installed capacity of 11,0 MWThe purpose of the construction of such small hydropower plantswas the energy supply of the remotemountain areas.

They were supposed to be derivationalhydropower plants and make use of thewater flows closed to these areas.

The investments SituationActually, 7 big hydropower plants and 38 small ones arecurrently in operation.

In Drin River are three operational hydropowerplants with a total installed capacity of1350 MW, “Vau i Dejës” HPP, “Fierza” HPP and“Koman” HPP. A concessionary contract hasbeen concluded for “Ashta” hydropower planton Drin river between the Ministry of Economy,Trade and Energy and Austrian Company“Österreichische Elektrizitätsëirtschafts-Aktiengesellschaft”, with an installed capacityof 48,2 MW and it currently is in the constructionphase.In Mat River are two operational hydropowerplants, “Ulëza” HPP and “Shkopet” HPP, withan installed capacity of 49 MW.In Devoll River “Banja” hydropower plantbegan to be constructed before 1990, with adesignated capacity of 60 MW.

However, only40% of the works have been completed andthe process was suspended. Actually, is signedthe concessionary contract for the constructionof the HPP’s cascade on Devolli river, between METE and the Austrian Company EVN AG,where are planned to be constructed 3 (three)Hydropwer Plants “Lozhan”, “Grabove”,“Skenderbegas-Çekin” and Banja HPPs, with atotal installed capacity of 319 MW.In Vjosa River, is in construction phase “Kalivaç”hydropower plant, with an installed capacity of90 MW.In Bistrica River are two operational hydropowerplants, “Bistrica I” and “Bistrica II”, with aninstalled capacity of 27,5 MW.

The Government of Albania has stronglysupported the development incentives of theprivate sector for construction and especiallyfor small hydropower plants constructionthrough the improvement of legal framework,simplifying the administrative procedure forinvestors guaranteeing a transparent andnon-discriminated process for the interested subjects.The old legal framework, for concessionsand private investments in public services,had not clear rules about the way of giving a concession, the procedures for the identification of proposals and offers evaluation, about the competition procedures enabling the executionof the Law for the unsolicited proposals from “special case”, to the only way of having concessionary contract.As a conclusion, the composition of the new legal framework was a necessity to ensure serious investments in public sector, the lost transparency in the process of the privatepartners’ elections, efficiency increase in public investments, public-private partnership enforcement and the creation of guaranteed basement for the successful implementation of concessionary contracts.The new concessionary legal frameworkhelped local and private investors to undertake investments in hydro energetic sector.


Law no.9663, dated 18.12.2006 “On Concessions”, amended, Council of Minister Decisionno.27 dated 19.01.2007 amendedThe purpose of this law is to create a favorable framework for promoting and facilitating theimplementation of concessionaire projects, enhancing transparency, fairness, efficiency,long-term sustainability in development of infrastructure and public service projects.This law is implemented for granting of concessions by contractual authorities for theeconomic activities in the sectors as: transport, generation and distribution of energy,telecommunication, and tourism.

Identification of Potential Concessions

1. The identification of potential concessions shall be done by competent ministries,and local government authorities in cooperation with the Concessions TreatmentAgency.

2. Potential concessions may be identified by solicited proposals or unsolicitedproposals by a proponent.

3. In case of solicited proposals, the competent authorities shall carry out an analysiswhere the potential concession should be implemented. This analysis shall bebased upon the principles of value for money, alignment of potential Concessionswith the national strategic objectives, as well as with sector strategic objectives,the technical and commercial feasibility of the potential Concession and itsability to attract potential Concessionaires and private financing.

4. In case of unsolicited procedures the proponent shall carry the analysis byevaluating the elements for each case

5. When the competent authorities consider that a concession should beimplemented they approve the commencement of selection procedures.

6. The Council of Ministers shall decide the competent authority for each concession.

Preselection Procedure

1. The contractual authority shall prepare the invitation for participation in nonprocedural and the pre-selection documents. The invitationto participate in the pre-qualification procedure shall be published in thePublic Announcements Bulletin, as well as in the international and local press.

2. The contracting authority performs the qualification of each bidder that hassubmitted an application for pre-qualification, in accordance with the criteria setforth in the prequalification documents.

3. The contracting authority shall publish the list of overqualified bidders in the PublicAnnouncements Bulletin within 30 days from taking the decision.

The contracting authority requests specific information that includes:


1. The project must contain:

• Feasibility study on technical solution for an optimal exploitation of water potential

• A detailed analysis of costs evaluation

• Business Plan

• The graphic of project execution

• Election of machineries and equipments that will be used

• A study on the way of linking with the system

• Graphic material

2. Hydrologic study

3. Geologic study

4. Business Plan

5. Report on Environment impact

6. Information from the Water Basin Council of the area where the concession will beexecuted, about the priority and the water amount that can be used for electric energyproduction

7. Respective licenses of the specialists that have completed the studies (notarized)


1. Authorization from the official representative that will follow the procedure up to theconcessionary contracts undersigned2. Court Decision for the company registration as a legal person.

Initiation of a Selection Procedure shall be done as follows:

1. The contracting authority shall, within 6 months of receipt of the documentationdecide to accept or reject the potential concession project derived from theunsolicited proposal.

2. If the unsolicited proposal is accepted by the contracting authority, the contractingauthority shall initiate a competitive selection procedure

3. The proponent shall be invited to participate in the competitive selection procedureand upon decision of the Council of Ministers; it shall be awarded a bonus onits technical and/or financial score during the competitive selection procedureup to a maximum of 10% of the points.

Administrative Review Procedures

1. The Concession Treatment Agency is the competent authority that supervises theConcessionaire procedures, and conducts administrative review of the complaints.

2. For each complaint should be paid a fee in the amount of 10% of the bid securityin advance.

3. Concession Treatment Agency concludes the administrative review within 30calendar days from the submission of the complaint and notifies the contractingauthority and the petitioner about the decision.

1) The petitioner is entitled to take an appeal against the decision of the Agencywithin 30 days since the notification at the Court of Tirana (Administrative Section).

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