Albania Government Subsidies for Water Utilities Reach €3.5 Million, Majority Spent on Electricity Costs

Water supply and sewerage companies received 350 million lek, or more than €3.5 million, in government subsidies last year. Official data show that most of this amount was used to pay for electricity. The share of this expense in total subsidies was 88.8%. The remainder was allocated to compensate vulnerable groups.

“For 2025, the Central Government has distributed subsidies totalling 350 million lek to twelve Regional Water Utilities, out of the fourteen established so far, as well as to the Vorë Water Utility.

The distribution of subsidies has been carried out in accordance with Instruction No. 1 of the Ministry of Infrastructure and Energy, dated 04.07.2025, ‘On the approval of the methodology, criteria, and procedures for the allocation and use of state subsidies for service providers in the water supply and sewerage sector for the 2025 budget year.’

Based on point 6(a) of this instruction, the subsidy fund is used to grant a 100% monthly discount on water supply and sewerage tariffs for vulnerable categories, as defined in point 3 of the methodology, to compensate for the consumption of the minimum vital quantity of up to 5 m³/month,” the document from the Water Regulatory Authority states.

For 2025, the amount used for vulnerable groups for the 12 Regional Water Utilities and the Vorë Water Utility is 39 million lek.

Meanwhile, the Authority clarifies that based on point 6(b) of the same instruction, the remaining part of the subsidy fund is used to settle electricity obligations for companies that have more than 75% of water production through mechanical pumping. This criterion has been applied to subsidize the Regional Water Utilities of Fier, Shkodër, Elbasan, Sarandë, Durrës, and the Vorë Water Utility.

“For companies that have not completed the regionalization process, according to the provisions of Council of Ministers Decision No. 302 specifically the Tirana and Kamëz Water Utilities, which are expected to be consolidated into the structure of the Tirana Regional Utility no subsidies were allocated in 2025 for covering electricity costs or supporting vulnerable groups.

This situation is linked to the strategic orientation of the central government to prioritize financial support for water utilities that have become part of the regionalization reform, in accordance with Decision No. 302, where the Ministry of Infrastructure and Energy/AKUK holds 51% of the shares. It also appears that during 2025, two regional water utilities, namely Gjirokastër and Dibër, did not benefit from subsidies,” the document states.