EBRD Grants €81.5 Million Loan To Albania’s OSHEE For Energy Sector Reforms And Debt Refinancing

Albania’s state-owned electricity distribution operator, Operatori i Shperndarjes se Energjise Elektrike (OSHEE), is set to receive a sovereign-guaranteed loan of €81.5 million from the European Bank for Reconstruction and Development (EBRD). This funding, approved on October 22, 2024, aims to strengthen OSHEE’s financial position and facilitate key energy sector reforms.

The loan will be used to refinance short-term overdrafts previously secured by OSHEE from commercial banks during energy crises. These funds, critical for the importation of electricity, will now be restructured to provide OSHEE with greater control over its financial stability. This move is part of a broader effort to enhance Albania’s energy sector, aligning it with international best practices.

In addition to debt refinancing, the EBRD’s investment is contingent upon a comprehensive reform program designed to improve OSHEE’s management and operational efficiency. This includes aligning the Albanian Distribution Code with the Energy Community Treaty and EU standards, improving network investment planning, and establishing a Sector Skills Council in Energy. The project also envisions the creation of an in-house Training Academy within OSHEE to foster the development of necessary skills in the energy sector.

The EBRD’s involvement will also promote the integration of renewable energy sources into Albania’s grid, supporting the country’s transition to a more sustainable energy future. This project, categorized as B under the EBRD’s Environmental and Social Policy, will undergo thorough due diligence to ensure that all environmental and social impacts are properly assessed and mitigated.

The total cost of the project is estimated at €81.5 million, with the EBRD’s loan providing the full amount needed. The bank also plans to mobilize additional commercial banking lending to further support OSHEE’s financial restructuring.

OSHEE, which supplies electricity to all regulated customers in Albania and acts as the supplier of last resort for unregulated customers, is expected to benefit significantly from this initiative. By improving its financial resilience and operational efficiency, OSHEE will be better equipped to manage the challenges of Albania’s evolving energy sector.

The EBRD will continue to monitor the project closely, ensuring that it delivers on its objectives of strengthening OSHEE’s financial and operational capacity, while also supporting Albania’s broader energy sector reforms.