Q. What type of power plant is the Albanian government building in the Vlora area?
A. The Albanian government is completing the construction of a new 97 MW, $112 million low-sulphur distillate oil fueled power plant at a six-hectare site about six kilometers north of Vlora. The project is supported by a $25 million credit from the World Bank’s International Development Association, $37.5 million from the European Bank for Reconstruction and Development, $37.5 million from the European Investment Bank, and $12.6 million from KESH (Albanian Energy Corporation). The World Bank’s credit is called the Albania: Power Sector Generation and Restructuring Project. Q. Why does Albania want to build the power plant and how bad is the electricity crisis in Albania? How has it affected Albanians?
A. Since the electricity crisis, Albanians have had to deal with frequent blackouts in their electricity supply. During the winter of 2007, electricity was cut eight hours per day because of the shortages, depriving Albanians of light, space heating, and cooking fuel. The situation continued during this past summer and news reports show increasing levels of frustration with the blackouts. All of this affects the quality of life and health in Albania and also deters investors in Albania. A recent study also found that unpredictable quantity of electricity supply remains an important hindrance to firms buying high technology equipment needed to compete in the global market place. Add to this the fact that there has been no new investment in electricity generation in Albania since 1984 – debilitating in any country – let alone in Albania where supply has fallen as demand is rising exponentially. Q. Why does Albania need a thermal power plant in particular?
A. The annual energy that Albania can produce today is 4,200 GWh while the demand is 6,800 GWh. That gap must be met somehow, either by importing it or producing it in country. Albania’s electricity crisis is largely the result of the fact that the country generates almost all its electricity from hydropower (dams), which drops in dry years when shrinking reservoirs cannot keep the turbines going enough to supply the energy needed. Before 1997, Albania produced enough electricity to meet domestic demand and also to export to neighboring countries. But, the demand for electricity has increased four times compared to the early 1990s, while poor maintenance of energy facilities and low rainfall have cut electricity output in half. While it has many benefits, hydropower is vulnerable to changes in weather, to drought cycles and climate change. Albania has made the decision to diversify its sources of electricity and to cover a part of the base load. Thermal power plants would help in that effort and provide a stable supply of electricity that would start to address rising demand and to optimize the production of electricity from the existing hydropower plants in Albania. Still, the Vlora power plant will only meet 20 percent of the gap in the current demand for electricity in Albania. The project is in line with the recommendations of the 2003 “Albania Energy Sector Study” and is part of the country’s Energy Sector Strategy, which was based on a very comprehensive study of the sector, approved by the government, and endorsed by the World Bank and other donors.
Q. Still, wouldn’t it be cheaper to just import electricity than build a new power plant?
A. The cost of importing more electricity is already hurting the budget of the Albanian government and diverting resources from development needs such as health care, education, roads, and tourism development. Also, the transmission lines that connect Albania with neighboring countries are old and severely limit the amount of electricity that can be imported. Shortages of electricity in the Western Balkans are also getting increasingly worse – electricity imports have already become more expensive and difficult to obtain. Albania is part of the ECSEE Treaty, which obliges each member to comply with the European Directive for electricity. Based on this, Albania has unbundled its power sector and put new rules in place for the electricity market. The thermal power plant will also help the generation company to benefit from the market competition, for example by selling power in peak periods. Q. When will the Vlora thermal power plant be built?
A. On August 1, 2007, the Council of Territorial Adjustment of Vlora region approved the construction permit for the power plant in an open meeting with public participation, including representatives from the Civic Alliance. This Vlora approval has been followed by approval on August 14 by the National Council of Territorial Adjustment led by the Prime Minister. Meanwhile construction work started on August 27, 2007. The plant should be operational by the end of 2009. Q. Is there any connection between the thermal power plant and oil deposit known as Petrolifera?
A. No, there is no connection between the thermal power plant and Petrolifera. To ensure its independent and uninterrupted supply of fuel, the Thermal Power Plant in Vlora will have its own storage tanks for fuel, and the fuel will be supplied through an off-shore terminal and undersea pipeline near the old ARMO facilities. Safeguards and Inspection Panel Q. How does the World Bank ensure environmental and social issues are evaluated in project decision-making?
A. The World Bank has a rigorous series of safeguard policies and procedures which are considered in relation to each project. As an integral part of the design, preparation, and implementation phase of this project, the Environmental Assessment and other Bank policies were followed. On May 2007, a local NGO has made a request for the Inspection Panel of the World Bank to assess whether these policies and practices were fully adhered to by the Bank (Inspection Panel). The World Bank Board of Directors is expected to consider the findings of the Panel and the views of Management on the investigation this Fall. Consultations Q. Were consultations held with local communities when the siting of the new plant was being considered?
A. Yes - several consultations were held in Vlora as part of the Environmental Impact Assessment (EIA) in 2002 and 2003. A meeting was held in Vlora on October 31, 2002 to introduce the project to the public and begin the public consultation process. A second meeting was held in Vlora on April 2, 2003 to receive public input on the scope of the project Environmental Impact Assessment. Over 100 persons attended the second meeting, representing various Government agencies, universities, nongovernmental organizations and the general public. The meetings were covered by Albanian media and television stations. Additional meetings were held with the Ministry of Environment on August 15, 2002 and March 31, 2003. A public consultation meeting was held on September 3, 2003 in Vlora to discuss the draft EIA. It was attended by representatives of national and local Government agencies, businesses, nongovernmental agencies and the general public. Details of the scoping sessions, including minutes of meetings, are available with the National Energy Agency which played a leading role in organizing these sessions. Environmental documents were open for consultation and feedback through World Bank Board approval of the project in March 2004. Q. Did public consultations meet the Aarhus Convention to which Albania is a party?
A. Responsibility for any obligations under the Aarhus Convention lies solely with its member state parties. As an international institution, the World Bank is not a party to the Convention. Nonetheless, the Bank has provided information to the Aarhus Compliance Committee in its investigation into the Government of Albania’s compliance related to this Project. While the Aarhus Compliance Committee found that the Government of Albania had only partially met its obligations under the Convention, it noted with appreciation the constructive contribution of the World Bank to its process of review of compliance. Q. How was the final site chosen?
A. An internationally recognized consulting firm prepared a siting and feasibility study of the proposed thermal power plant with financing from the United States Trade and Development Agency in 2002. Seven sites in six locations (two were in Vlora) were evaluated on the basis of ten criteria, each assigned a different weight. These criteria and their weights were: environmental remediation (12%); air quality concerns (8%); levelized cost (12%); socio-economic concerns (8%); reduction in transmission system losses and voltage profile improvement (12%); transmission availability and proximity (10%); fuel availability (14%); water and sewage needs (10%); transportation (8%); and property availability (6%). Vlora. At the end, the Vlora and Fier sites were found to be the best from a transmission perspective, but the Vlora site offered some advantages: i) as the Vlora site is near the coast, fuel does not have to be transported in-land by pipeline or truck ; and ii) sea water can be used for cooling. In mid-November 2002, the Ministry of Energy informed the World Bank about its decision to build the thermal power plant at the Vlora B site.
Environment Q. Did the Government carry out an Environmental Assessment (EA) of the project?
A. Yes – Draft and Final EA reports were prepared by U.S. Trade and Development Agency-supported international consultants and shared with the public. The EA was also reviewed by independent consultants financed by the Canadian International Development Agency. Safeguard experts from the World Bank, European Bank for Reconstruction and Development and the European Investment Bank also reviewed the EA. Reviewers concurred that the environmental impact would be limited. An EA Addendum was prepared to address additional implementation details. An Environmental Management Plan (EMP) was incorporated into the Engineering, Procurement and Construction contractor documents. The Government and KESH have formally agreed to carry out the measures specified in the EMP. The site and the EA were also approved at various levels of the Government (Vlora Municipality, Ministry of Environment, Council for Territorial Adjustment, etc.). The EA was disclosed, both in English and Albanian, in Albania and the World Bank's Infoshop. Q. Did the World Bank’s EA consider the potential for 300 MW for the power plant and the environmental consequences?
A. The EA and public consultations for the power plant focused on the impact and emissions of a 100 MW. The project supported by the World Bank, EBRD, and EIB is limited to 97 MW. However, the EA mentioned and studied the potential and requirements for future expansion to 300 MW, though the likelihood for such expansion in the near-to-mid term (given current financial considerations) appears low. Updated analysis of air and thermal water emissions suggest that an expanded plant would still operate within EU standards. Should the Government decide to proceed with additional generation units (either at the Vlora site or another location), then a new full-fledged EA will be required. The World Bank is not considering financing such an expansion at this time, however. Q. Will the proposed power plant worsen environmental pollution and emissions in Albania?
A. The plant will use low-sulphur distillate oil and not heavy fuel oil. The emission limits set by the plant design are in compliance with the permissible limits set by the EU Directives. Furthermore, the plant will be constructed with the capability to switch to using gas as the fuel as soon as gas becomes available in Albania, so reducing environmental pollution even further. Q. Will the power plant damage the beach or access to it?
A. After the construction period, the beach will be returned to its original state. The plant is located 400 meters inland from the shoreline, the water discharge pipe goes out more than 600 meters from the coast and the oil terminal is approximately 4 kms out from the beach. Q. Would the proposed power plant damage the Narta wetland?
A. While the site is not far from the Narta Lagoon, it is outside the proposed protected zone surrounding the Lagoon and is isolated from it both by distance and by a spit of land extending out from the coastline. In the context of the GEF/UNDP Project for Conservation of Wetland and Coastal Ecosystems in the Mediterranean Region, the project site also was discussed with UNDP, which informed the World Bank that it would have no objection if the site was outside the protected zone around Narta Lagoon. Emissions from the plant are minor and will not cause harm to Narta ecosystems. Cultural Heritage Q. Did the World Bank consider cultural heritage in the EA?
A. In keeping with its procedures for this type of project, international consultants prepared a detailed siting study for the power plant. During the scoping sessions and the preparation of the environmental assessment for the project, the issue of the cultural significance of the Triport Cape area near the project site was not raised. However, in view of the concern about the issue, the World Bank had an experienced international cultural heritage specialist conduct a site visit and requested the Albanian Government’s assistance in evaluating the cultural heritage in the area. The Ministry of Tourism, Culture, Youth and Sports reviewed the matter and informed the World Bank that they “have identified no historical values or studies for the area as a specific historical zone.” Nevertheless, requirements of both Albanian law and World Bank procedures regarding “chance finds” of cultural or archaeological interest were specified in the construction contract, and ultimately, no findings were encountered during site works. Q. It has been said that Triport/Aulona is important historically because a number of Sephardic Jews landed there after fleeing persecution and the Spanish Inquisition. Would the proposed power plant affect the historical value of the landing site? A. There has long been a presence of a Jewish community in the area of Vlora, which was once viewed as the third largest Jewish community in the Mediterranean. The town of Triport/Aulona flourished from the 3rd century BC to 3rd century AD. But it is strongly believed by the Albanian Institute of Cultural Monuments that because the town of Triport/Aulona had already faded by the end of the 3rd century AD, the life of the town had moved to Vlora. There is no indication that the plant site was a suitable landing area for boats. Therefore, when the Sephardic Jews arrived in the area (by land or sea), they are most likely to have landed in the town of Vlora, some 5.8 kilometers away from the proposed building site for the power plant. In excavations for the power plant, no ceramics or traces of earlier towns were found.
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