Albania is making rapid progress with its plans to meet renewable energy targets, with the construction of a 12.9 MW floating solar photovoltaic (PV) farm thanks to a €9.1 million loan provided by the European Bank for Reconstruction and Development (EBRD). The farm will be the first floating solar plant of this size in Albania and the Western Balkans.
The plant will be built on the Vau i Dejës hydropower plant reservoir, which is managed by Korporata Elektroenergjitike Shqiptare (KESH). It represents a breakthrough in innovative green technology, using Albania’s rich solar resources while avoiding the use of scarce land.
The EBRD loan will be provided to a special-purpose vehicle owned by KESH and established for the purpose of the construction of the project. Structured as a project finance loan and provided on a commercial basis, the EBRD loan is the first such financing by an international financial institution and will contribute to the commercialisation of KESH, one of Albania’s biggest state-owned utilities.
KESH owns and operates three large hydropower plants with a total capacity of 1,350 MW that account for about 70 per cent of Albania’s domestic generation. The new solar PV plant will contribute to making KESH more resilient to climate-induced risks in relation to hydrology and seasonality.
The project also aligns with Albania’s broader ambition to develop its solar capacity, which has resulted in two successful auctions supported by the EBRD and delivering highly competitive tariffs: the 140 MW Karavasta project and the 100 MW Spitalle project.
The EBRD also mobilised €315,830 for the project preparation support, including from the green economy project preparation and implementation framework financed by the Austrian government (the DRIVE Fund) and from the TaiwanBusiness-EBRD Technical Cooperation Fund.
“We are delighted to support this ground-breaking project, which is another major step in Albania’s successful drive to boost solar capacity and improve its energy mix. The project is remarkable because of its innovative technology, positive environmental impact and commercial logic. It also has the potential to be replicated in the broader Western Balkans region, which has many hydropower reservoirs. This is our first opportunity to finance floating solar PV technology and we look forward to many similar projects in the future,” Francesco Corbo, EBRD Regional Head of Energy for the West Balkans, said.
“The project is of special importance for KESH. It positions the company as a contributor to Albanian and global initiatives to invest in renewable generation using innovative photovoltaic technology that is compatible with hydropower generation. Although modest in size, the project holds opportunities not only for the further development of public generation assets on a strong commercial, technical and environmental basis, but also showcases the know-how that is required to operate a hybrid hydro-photovoltaic system. This is another great example of the ongoing partnership between the EBRD and KESH,” Besjan Kadiu, CEO of KESH, added.
The EBRD is a leading institutional investor in Albania. To date, the Bank has invested more than €1.5 billion in loans in 110 projects in the country.