As Albania strives to diversify its electricity generation to avoid near-total dependence on hydropower, several foreign renewable energy developers have seized the opportunity to win contracts. French global renewable energy company Voltalia has two solar photovoltaic plants planned in the Balkan country, after winning government tenders. The Karavasta project, with a capacity of 100 megawatts (MW), is expected to deliver its first electricity to the grid by the end of 2023.
Constantin von Alvensleben, country manager of Voltalia in Albania, speaks with fDi on the opportunities and challenges faced by investors in the energy sector in the country. As the former CEO of the country’s largest airport in terms of passenger numbers, Tirana International Airport, he also reflects on the impact of increased interest from international tourists.
Q: What is your assessment of Albania’s investment climate in the energy sector compared to its Western Balkan peers?
A: Voltalia is particularly pleased with the investment climate in Albania because the conditions under which we are pursuing two large solar projects in this country are very favorable. The Karavasta project is already well advanced in its construction and we expect to deliver the first megawatt hours by the end of this year. This demonstrates a very rapid implementation process that would not be possible in many other states.
Our second project, Spitalla, will start very soon. The Albanian government is very willing to support and promote projects that have gone through a competitive bidding process and the winner has been chosen based on the attractiveness of their bid. The government has done well to bring such large-scale projects to market and support their implementation. To my knowledge, these are by far the largest projects in the field of renewable energy in the Western Balkans, and they are being implemented at high speed.
Question : What regulatory changes would make it easier for companies to invest and operate in Albania, particularly in the renewable energy sector?
A: Even though our two current projects – Karavasta and Spitalla – are progressing at a good pace, we face challenges for projects that may not have the same priority for the government.
Permitting processes often take a long time and developers also face a shortage of qualified personnel or deal with subcontractors who lack sufficient awareness of health, safety and the environment. These questions are particularly relevant for the development of renewable energies. However, there are broader issues affecting the business climate that are of interest to any foreign investor considering entering Albania.
Continued investment growth depends to a large extent on the availability of land suitable for development; Foreign investors are facing certain challenges as land prices have increased significantly. In addition, not all owners who may offer land to an investor can hold the full title. Therefore, I can only advise any new investor to check the securities carefully and rely on professional legal advice before making any investment.
Q:Hwhile the tourism boom in Albania has created opportunities for investors?
A: Tourism is another sector that is growing dynamically, as I saw in my previous role as CEO of Tirana International Airport until 2022. Albania has become increasingly sought after as as a tourist destination and, as a result, the number of visitors has increased so sharply that it has triggered significant investments in airport, hotel and road infrastructure.
