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International court rules on hydropower plant contract dispute between Albania and Hydro S.R.L.

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Albania’s Ministry of Infrastructure and Energy announced the International Court of Arbitration (ICA) has ruled in Albania’s favor on a breach of contract dispute the country had with Italy-based Hydro S.R.L. over constructing the 108-MW Kalivac hydropower plant.

In a press release, the Albanian government said the ICA dismissed Hydro S.R.L. claims saying the company did not fulfill the contract. The decision says Albania will receive about US$212 million for compensation, unpaid interest and court costs.   

The ministry made the announcement late last week followed by a Facebook post from Albania Minister of Infrastructure and Energy, Damian Gjiknuri, which said, “the Kalivac hydropower plant will be materialized by a serious investor.”

The investor is a Turkish-Albanian consortium, Ayen Enerji and Fusha, according to the ministry.

The plant will be built near Kalivac village, in southern Albania, according to the Albanian Public Procurement Agency. The ministry estimates the cost to build the project is about $155 million, it will annually produce about 366.6 million kWh and is expected to be completed sometime in 2020.

Albania said, in October 2017 it signed a new agreement with the consortium to build and operate the plant along with a 35-year concession contract.

In May 2017, during the time period the ICA was reviewing the dispute, the Albania Ministry of Energy and Industry published a new tender for plant’s construction and 35-year concession. According to the ministry, the project is a public/private partnership too include building a dam as part of the scheme.

In October 2014, Hydro S.R.L. filed a claim against Albania over the cancelled contract at the ICA International Chamber of Commerce seeking the resolution of the concession agreement. The Albanian government filed a counter claim.

In 2013, Edi Rama was elected prime minister and during his administration, Albania canceled agreements with Hydro S.R.L. made during the previous administration.

In 2012 during the administration of the country’s then Prime Minister Sali Ram Berisha, Albania and Hydro S.R.L. signed contracts to build the plant and a 35-year concession agreement.

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