The government as a bunch of fines/ Balluku reinstates the canceled concession of the solar park in Akërni

In August 2018, the Albanian government opened the auction for the construction of the first large solar power plant in Albania. It was a 100 megawatt photovoltaic park, which was scheduled to be built in Akërni, Vlorë.

After the competition, on November 10 of that year, the Ministry of Infrastructure announced the winner of the power plant to the consortium India Power Corporation. According to the terms of the auction, the company would invest 70 million euros to build the power plant with its own money and would sell half of the energy produced by it to the Albanian state for 15 years at a price of 59.9 euros per megawatt.

The winning consortium created the company Akërni Solar in Albania, which would build the photovoltaic park. This company was owned by a company called Arka Energy, headquartered in the Netherlands.

But just a month after the announcement of the winner, the Ministry of Energy would be turned upside down. In December 2018, Edi Rama dismissed Damian Gjiknuri from his post, appointing Belinda Balluku as the head of infrastructure and energy.

Upon assuming the position of minister, Ms. Balluku put an end to many of her predecessor's projects, one of the most important of which was the Akërnia photovoltaic park.

Cancellation and arbitration

For two years, Belinda Balluku refused to sign the contract with India Power Corporation for the Akërnia power plant, even though the company had been declared the winner by the Albanian state. Despite the company's continuous letters to the Ministry of Energy to conclude the contract, she never received a response.

But the reason behind why the contract was not signed was the high price of 59.9 euros that had resulted from the auction, as a year and a half later, the Ministry of Energy held the auction for Karavastana, where the French company Voltalia offered a price of 24.9 euros per megawatt.

Found in these conditions, in December 2020, India Power Corporation sued Albania in the Court of Arbitration in Washington, demanding 110 million euros in damages from the government for the unilateral termination of the contract.

The arbitration proceedings continued with the appointment of the panel of arbitrators that would judge the case. According to the rule, both parties appointed one judge each, while the two judges appointed by consensus the third member, who also holds the position of chairman of the panel. But after the constitution of the panel, silence fell.

Arbitration Cancellation
One year after registering the case, the Washington Arbitration Court announced its suspension. According to the court's announcement, the plaintiff, namely the company Arka Energy, had not paid the preliminary fees to the court according to the rules in force. And only 7 months later, the Court announced the final closure of the arbitration, for the same reason after the company did not pay the court fees.

At the time, it all sounded strange, as the company had a very strong case. It had been declared the winner in a regular competition by the Albanian government, and later the government refused to sign the contract, without giving any reasonable reason beyond arrogance.

So a company that had a great chance of winning millions of euros abandoned the case by not paying the minimum court fees, raising many questions. And yet the situation would be clarified later.

Cancel cancel
The company's withdrawal from arbitration was apparently the result of behind-the-scenes efforts to reactivate the project. Two months ago, during an event in Fier to present the government's energy achievements, Belinda Balluku gave the first signal that the situation had changed.

"The first park (Karavastaja) is in process today, it has started producing energy. In the meantime, we are of course waiting to have the first results from Spitalla and on the other hand we have revived the Akërnia project, thus making the first block of large photovoltaic parks," declared Balluku a few days before the elections in the district where she was the political campaign leader.

This sentence was not in vain. Kapitali has learned that two weeks ago the contract for the Akërnia power plant was signed, with the same conditions as in the tender held in 2018. So, the company will build the park and the state is obliged to buy half of the energy produced at the price of 59.9 euros per megawatt. The question that arises now is why the price of 59.9 euros is no longer considered expensive.

What happened that made the government change its mind and approve a concession contract that it had canceled?

This is an adventure with significant damage. In 2021-2022, the Albanian government massively purchased electricity at a price of 200-300 euros per megawatt, forcing KESH to spend over 500 million euros on imports. Who is responsible for the 7-year blockade of Akërnia and who will pay the costs that were imposed on Albanian citizens.

But above all, this behavior makes Albania a non-serious state and the government a bunch of scoundrels. And this is not an isolated case. The same thing happened with the Thumanë-Kashar concession. But if there, the government has the excuse that it changed the concession formula, in the case of Akërnia there is no change. Kapitali.al