Vladimír Urbánek (Kurzy.cz)
Czech markets  |  February 07, 2013 11:06:12

CEZ Group has started the process of international arbitration against Albania


CEZ has officially informed the Albanian government of its intention to conduct international arbitration. The reason is neochráněná investment distribution company CEZ Shpërndarje. CEZ Group of the step promises to pay damages to which he is entitled under international law.  

ČEZ derives its claim for damages based on an agreement between the Czech Republic and the Republic of Albania on the promotion and reciprocal protection of investments and the Energy Charter Treaty defining international cross-border cooperationin energy, which both countries are signatories.

CEZ Group has entered the Albanian market in May 2009 with the acquisition of 76% stake in the Albanian distribution company, and the remaining 24% owned by the Albanian state. The value of the initial investment amounted to 102 million euros, the price is about ten times lower than that for example other investors pay to buy electricity distribution companies in Romania. Albanian acquisition forms of FDI only 3.6% of total investment CEZ is then less than a percent (0.7%). CEZ Group's own abroad significant energy assets in seven countries, all except Albania is to be a return to or even surpasses them.

The situation in Albania was compiled at the beginning of last year, when as a result of last year's drought was the Albanian state electricity company KESH forced electricity at much higher prices imported from abroad, which brought it near bankruptcy and without the help of the Albanian government would not survive. She tried to resolve the situation, unfortunately destitute of means unique in Europe, thus transferring the costs onto the shoulders of the foreign investor, CEZShpërndarje. The January 1, 2012 was therefore increased by the regulator from KESH price by 91%. This negative effect after intense negotiations managed to partially mitigate the new decision the regulator to reduce the entry price of electricity from the national power KESH from 2830 to 2 200 ALL / MWh, representing a reduction of full-year growth of 91% to 49%, and approval of studies establishing the initial the amount of bad debts. Another turning point, however, meant exposure to tax arrears and penalties amounting to 4 trillion. ALL (about 28 miles EUR) or fines for failure to comply with the volume of imports of electricity 430 miles . ALL (app. 3 miles . EUR). At the beginning of October 2012, CEZ Group changed the composition of the Supervisory Board and Board of CEZ Shpërndarje independent experts to sedate vypjatého negotiating style. 16.11 the company CEZ Shpërndarje after many other failed negotiations with the Albanian side has decided to stop the supply of electricity to all Albanian nationals waterworks that have long pay for electricity. Disconnecting it started to defend the Albanian police, which even six employees CEZ Shperndarje arrested on a complaint of abuse of power waterworks.The following day was then CEZ Shpërndarje unprecedented court decision forced resume waterworks and other state institutions to connect. January 21, 2013 Albanian Regulatory Authority decided to withdraw the license of CEZ Shpërndarje and determined administrator who supervised administration took over the company, including all decision-making powers and responsibility for running the company, and who is therefore transferred the rights of statutory bodies.

Barbora Půlpánová, ČEZ spokesman

 

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