ČEZ Shperndarje Began to Disconnect Indebted Waterworks in Albania From Its Power

ČEZ Shperndarje has resorted to disconnecting power supply to all Albanian state-owned waterworks that have failed to settle their debts in the long run. The total sum of receivables from such companies has reached EUR 38 million. ČEZ decided to disconnect the water companies after a series of unsuccessful negotiations with the Albanian counter-party concerning the high debt settlement.

ČEZ has repeatedly invited the waterworks to settle their debt and repeatedly postponed the settlement deadlines. ČEZ has tried to show a willing approach toward the other party also by proposing a repayment schedule or offering an option to settle just a portion of the debt. The Albanians have even rejected a proposal for mutual offset of the waterworks’ debt with the debt of ČEZ Shperndarje toward KESH, the Albanian state-owned power producer.

ČEZ Shperndarje now has no other option but to disconnect the waterworks from power supply. As a private company that has obligations also toward its numerous other customers, such as households and small and medium enterprises, cannot afford to continue and tolerate this kind of conduct since the financial loss incurred is substantial.

The company has informed the relevant state authorities and the public well in advance so that they can prepare for this unpleasant situation. An information campaign has been prepared to inform the public, inviting people seriously to stockpile enough drinking water.


The situation in Albania got more complicated early this year when, due to the drastic drought of last year, the Albanian state-owned company of KESH had to import power from abroad for much higher prices, which brought it on the verge of bankruptcy; the company would not have survived without receiving help from the Albanian Government. The local Government tried to resolve the situation early this year with a decision unprecedented in Europe: All costs were placed on the shoulders of the foreign investor, ČEZ Shperndarje. Therefore, as of January 1, 2012, the local regulator ordered that the price charged to the foreign investor for power taken from KESH should be 91% higher. Following intensive negotiations, this negative impact could be partially alleviated by the regulator’s new decision to reduce the price of input power supplied by the KESH state-owned power plants from 2,830 to 2,200 ALL/MWh, which lowered the year-on-year price growth from 91% to 49%. Furthermore, a study was approved that determined the initial value of bad debt. However, the Albanian tax authority’s order imposing a penalty of ALL 4 billion (approx. EUR 28 million) for outstanding taxes and penalties and another ALL 430 million (approx EUR 3 million) for failing to meet the agreed electricity import levels has brought yet another turn in the matter. In early October, the ČEZ Group changed the staffing of the Supervisory Board and the Board of Directors of ČEZ Shperndarje, replacing the original personnel with independent experts in order to calm down the heightened style of negotiations.

Barbora Půlpánová, ČEZ’ Spokesperson

November 2012