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How the government's 1 billion euro dream for Skavica was "extinguished", the shadows of a 60-year-old project

2024-03-06 10:42:26Investigim SHKRUAR NGA ESMERALDA TOPI
Skavica

Since 1963 when it was first sketched until today, the construction of the Skavice hydropower plant has been the dream of all governments in Albania. The Socialists appeared determined to turn the dream into reality in February 2016, three years after taking power.

But the fact is that eight years later, the project for the construction of the HPP in the Cascade of the Drin River has remained at the limits of a perennial dream. Plans to open the construction site in November of last year have failed and there is still no concrete deadline that gives the green light to construction. 

"We are starting the last phase, which is the phase of setting up the negotiating group for financing and closing the contract, giving this project the opportunity to open the Skavica site in November 2023," declared the Minister of Energy Belinda Balluku in January of the year 2023.

How the government's 1 billion euro dream for Skavica was
Source: Ministry of Energy (Drin Cascade Utilization Scheme)

The buzz about the project faded a year later, when Skavica suddenly 'disappeared' from the priority projects of the Ministry of Infrastructure and Energy. 

In the work balance of the Ministry of Energy, Belinda Balluku did not mention Skavica neither in the achievements nor in this year's plans. 

The European dream that ended in the USA
In October 2020, the government signed a memorandum of cooperation with the American company Bechtel for the Skavica hydropower plant. The agreement, among other things, stipulated that Bechtel would find financing for a line of credit that would then be repaid by KESH.

Cooperation with the Americans angered Brussels. Three months after the Albanian government signed the memorandum with the Bechtel company, the European Union officially withdrew from Skavica's funding. Until those moments, the EU had financed 1.5 million euros in the form of a grant from the Investment Fund in the Western Balkans. 

The government quietly passed the cancellation and quietly continued the plans with the American company. In July 2021, Bechtel signed the contract with the Albanian government through a special procedure by the Assembly, which bypassed the public procurement law.  

How the government's 1 billion euro dream for Skavica was

Three years later, the Bechtel company tells Faktoje that the first phase of the project has not yet been finalized.

"Bechtel, together with KESH, are working to finalize the first phase of the study for the Skavica Hydropower Plant Project. The study includes geological and geotechnical investigations to support the preliminary design together with the preparation of the Social Environmental Impact Assessment", Bechtel

According to the Albanian Electric Energy Corporation, the first phase for Skavica is expected to be completed within the month of June.

"The technical-financial and social-economic and environmental assessment, as well as the selection of the favorable project option, are expected to be completed at the end of the first 6 months of 2024, at which time the value of the financing will also be known of the project." - claims KESH, without giving explanations for the violation of deadlines.

Skavica demands over 1 billion euros
The government seems to have made the calculations wrong, when it declared that the great Skavica required 510 million euros to build. Bektel Americans have made other calculations. According to a preliminary assessment by Bektel, the bill for the construction of Skavica requires at least twice the declared amount, i.e. more than 1 billion euros. 

And this is another serious impasse that will put the Albanian government in trouble. This is because, in February 2016, the socialists withdrew from a similar alternative for Skavica, due to the high cost (662 million euros) as well as the huge social costs, which the construction of a hydropower plant at the quota of 441 meters above sea level would entail. . 

Former energy minister Damian Gjiknuri based his rejection of this alternative on a 2009 study by the French company Sogreah.

The study, which Faktoje managed to secure, provided several alternatives for the construction of Skavica. The least useful variant, according to them, was exactly the big Skavica. 

"All alternatives have good profitability, except for Skavica 441. The compensation and cost of land acquisition for Skavica 441 is very high, making this alternative less attractive." - argues the study of the French company. 

How the government's 1 billion euro dream for Skavica was

Also, referring to the same document, from the construction of Skavica at the quota of 441 meters above sea level, 5,861 hectares of land surface (about 58 square kilometers) would be contained, while about 10 thousand inhabitants would have to move. 

According to the French, the best alternative for the Skavica project would be the construction of a hydropower plant at 385 meters above sea level. 

'Great Skavica'
But the Americans prefer the alternative of the great Skavica. 

The choice of the Americans means the construction of a Hec-i with an installed power of 210 MW, at an elevation of 443 meters above sea level. (2 meters higher than the variant that the French were knocking down)

"All of us technicians welcomed the project with applause. Because Skavica would serve as a regulator for the Drin cascade. That's why we supported it. But what leaves me with a bad taste is the part of the financing," former Deputy Minister of Energy Gjergj Simaku, one of the most well-known energy experts among socialites, tells Faktoje.

How the government's 1 billion euro dream for Skavica was

"Companies in general, those that provide money for the construction of these types of works, require a high rate of return on investment. So the loan will be taken from Bektel, the company will build it, produce energy and sell it to whom?! Albanian side. The whole secret of the problem is precisely this. At what cost and price will the energy be sold within the energy mix in KESH. The government is still not clear if it will make a pre-purchase contract of energy when Bektel builds Skavica." - further clarifies Simaku, as he emphasizes that "as long as this procedure has not happened, those who decide the costs should be considered well who is the financier because the latter demands the money back. "This is Skavica's impasse, the real one." - concluded Simaku's reasoning. 

While Azmer Dulevi?, an expert on energy issues, says that due to the high financial and social costs, the government should give priority to wind and solar energy. 

"Replacing a hydro power plant like the one in Skavica can be a complex challenge, but there are several alternatives that can be considered: Wind Energy: Using wind turbines to produce energy from the wind is a popular alternative to the hydro plant. This source of energy is cleaner and has no impact on the flow of rivers. Solar Energy: Using solar panels to capture the sun's energy can be a good replacement option. It is an eternal and cleaner source," Dulevi? argues for Faktoje. 

The objections to Skavica 

Skavica is one of the most opposed projects by the residents of the Dibra area, civil society, environmentalists and the opposition. 

The concerns of the inhabitants of the Black Drin valley were formalized in a lawsuit addressed to the Constitutional Court through two associations and the Albanian Committee of Helsinki. But the Constitutional Court, although it found some violations, did not repeal the law on the grounds that: "The Court assessed that, since the law is still in the first phase of its implementation, the violations found before the adoption of the law can still be repaired by taking concrete steps for public involvement in information and decision-making."

How the government's 1 billion euro dream for Skavica was

For the residents of Dibra, this is an unprecedented case. 

"It is an unprecedented case with this type of decision-making. The fact that it has not been declared for repeal, the law remains in force. It is simply a recommendation for the next stage and that is an absurdity. It also leaves room for Bechtel or the government to maneuver with other tactics to make this phase easier for them." - says Ferzileta Gjika, representing the association 'Opposition to the Skavica Dam'. 

Gjika emphasizes that the legal battle in the Constitutional Court will continue, if KESH moves to the second phase of the project, which is the construction of the hydropower plant. 

Conclusion 
At a time when dreams are intertwined with realities, the Skavica hydropower plant project in Albania has taken on the role of the protagonist in a drama that has been playing out for decades. Announced as a priority by the Socialists since 2016, Skavica has been a symbol of energy development that has remained stuck in sketches and documents from 1963. Despite promises and grand statements, the project has remained a dot on the distant horizon of Albanian politics, challenging not only the economic logic with the dizzying financial demands, but also testing the patience of those who wait for words to turn into deeds. /factoje.al

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