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The Albanian energy regularity agency, ERE, on Monday stripped the local subsidiary of the Czech power giant CEZ of its operating license, effectively taking it back into state control.
The decision, which outrights nationalizes the utility company, CEZ Shprendarje, is the latest twist in a long-running dispute between Tirana and the Czech company over unpaid debts.
“CEZ failed to meet its legal obligation to secure part of the supply of electricity through imports,” the head of ERE, Sokol Ramadani, said.
ERE has appointed an administrator to run the company until the dispute with CEZ Group is resolved.
In 2009, the Albanian state sold off 76 per cent of its shares in Operatori i Sistemit te Shperndarjes, OSSH, a company that managed the electricity distribution of up to 1 million consumers, with revenues of over 300 million euro per year.
CEZ bought the stake for 102 million euro and the World Bank helped smooth the sale with a $100 million partial risk guarantee in case the Czech company opted out.
But CEZ failed to cut losses and stem theft in the grid, forcing the government to subsidize costly imports for its state-owned power corporation, KESH.
The company has been locked in a dispute with the Albanian government over unpaid electricity bills since the beginning of 2012.
In a statement, the CEZ group slammed the decision to strip its subsidiary of its operating license as an expropriation. It said the move was against Albania's own law and announced legal action.
“In principle we opposes this conduct… and consider it incompatible with any European standards but also with any Albanian laws,” CEZ said.
“The company is going to take legal action immediately and notify the Albanian Government of its intention to initiate international arbitration,” it added.
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