The privatisation of Albanian distribution company OSSH will significantly enhance the electricity supply situation in the country, according to the International Finance Corporation (IFC).

The Albanian government has finalised the sale of OSSH to Czech utility CEZ, which was selected as the winning bidder in October 2008. CEZ has bought a 76 per cent stake in OSSH, which supplies around 5.3 TWh to nearly a million customers annually, for EUR102 million.

The purchase of the distribution company is part of wider plans by CEZ to expand in Europe. The firm recently bought Turkish grid firm SEDAS and has also signed a contract to acquire German coal mining firm Mibrag.

CEZ is forecasting electricity demand to grow at an annual rate of around five per cent in Albania, and says that it will use its experience of operating distribution companies and restructuring in Bulgaria, Romania and the Czech Republic to the benefit of Albania.

“We are sure that CEZ will significantly improve the supply of electricity in Albania, which will lead to increased customer satisfaction,” said Genc Ruli, Albania’s Minister of Economy, Trade, and Energy. The IFC advised the Albanian government on the unbundling of OSSH, structuring the transaction, and executing an open, transparent and competitive bidding process.

Shahbaz Mavaddat, IFC Director for Southern Europe and Central Asia, said, “The privatization of OSSH is the result of an advisory effort to ensure a fair and transparent process, building on our previous work with the government. The contract award to CEZ is another major milestone in improving the economic and social well-being of Albania and its citizens.”

Albania has been suffering from chronic electricity shortages in recent years, caused mainly by a lack of investment in infrastructure. Per capita electricity consumption is approximately one-quarter of that in most West European countries, and the country is heavily reliant on electricity imports.