Statkraft-EVN Joint Venture Building 340-Megawatt Hydropower Project in Albania

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Researched by Industrial Info Resources (Sugar Land, Texas)--One of the largest hydropower projects currently being undertaken in Europe comprises three plants in Albania's Devoll River valley. Austrian utility EVN AG (WBAG:EVN) and Norway's renewable energy group Statkraft are the 50:50 members of the joint venture on the $1.37 billion project, which will have a total capacity of 340 megawatts (MW) and generate about 1,000 gigawatt-hours (GWh) annually when all three power stations are in operation.

The joint-venture partners have been negotiating the project contract with Albanian authorities since January 2008 when they were awarded a build- operate-transfer concession for a period of 35 years, or until the project reaches an annual output of 59,000 GWh and has exploited the total potential power generation capacity of the Devoll River valley. The full scheme, when realized, could increase Albania's power production capacity by 20%.The three peak-load hydropower storage scheme is scheduled for completion in 2016. The Devoll flows into the Adriatic Sea south of the country's capital, Tirana.

One of the three plants in the project, in Banja, is partially constructed after being abandoned as the communist era came to close. The other plants will be built in Lozhane-Grabove and Skanderbegas. Albania, like Austria and Norway, bases its power generation on hydropower, and at present, three plants on the Drini River supply more than 90% of Albania's power with a total installed capacity of 1,450 MW.

The project also will bring in foreign direct investment into the country, deliver jobs and stimulate economic development. The IMF and the World Bank are concerned that the country's energy shortfall could adversely affect the country's strong economic growth, which has been averaging about 6% per year. EVN CEO Burkhard Hofer said the joint venture is going ahead with the Devoll valley projects despite the current global financial crisis. This serves as a strong expression of confidence in Albania.

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