ČEZ Has Initiated a Process to Claim the World Bank’s Guarantee

Due to repeated unforeseeable and now even illegal steps taken by Albania, which have negatively affected the operations of ČEZ Shperndarje as the local power distribution company, the ČEZ Group has taken the first steps to claim the World Bank’s guarantee.

“We have now requested a compensation of damage from Albania, which is covered by the World Bank’s guarantee,” says Tomáš Pleskač, Distribution and Foreign Assets Division Director. This is the start of a 60-day period during which the parties may reach an agreement. If they fail to do so, the guarantee can be claimed. “Now we have experienced a clear breach of the distribution company’s rights. The situation is very tense,” Pleskač explains. ČEZ negotiated a guarantee from the World Bank before entering the Albanian market in order to protect its investment in a non-consolidated business environment. The guaranteed investment value is EUR 60 million.

Today, the Albanian Energy Regulation Authority has also officially notified ČEZ Shperndarje that they have initiated a procedure to withdraw the company’s license. This procedure may result in the termination of ČEZ Shperndarje’s activities in the local market. In such a case, the ČEZ Group is going to protect its investment by means of an international arbitration.  

On Friday, November 16, after a series of unsuccessful negotiations with the Albanian party, ČEZ Shperndarje decided to discontinue power supply to all Albanian state-owned waterworks that have in the long run failed to settle their bills for power. However, the Albanian Police began to obstruct the steps needed to disconnect the facilities from power and even arrested six employees of  ČEZ Shperndarje based on a crime report filed by the waterworks on the grounds of alleged misuse of authority. Such a conduct is utterly inconsistent with the Albanian legislation; according to the local regulator’s provisions, the power distributor is fully authorized to stop supplying power to those who fail to pay their bills for electricity. 

On Saturday, November 17, based on an unprecedented court order, ČEZ Shperndarje was forced to reconnect again all the waterworks and other governmental institutions. The company yielded to the order in order to prevent being charged additional penalties, though unjustified, which would further increase its financial loss. ČEZ Shperndarje is going to appeal against the court order.

Barbora Půlpánová, ČEZ’ Spokesperson

Published
20
November 2012