Prague, Vienna - Czech semi-state energy company CEZ has reached a settlement with Albania over the former's unsuccessful investment in the Balkan country. Albania has agreed to pay EUR 100 million to CEZ in order to end CEZ's arbitration process. The energy company argued that Albania had failed to protect its investment. The agreed-upon compensation is approximately equal to CEZ's initial investment in Albania.
CEZ has already received EUR 4.5 million from Albania, and the rest of the sum will be transferred in annual payments until 2018, said CEZ spokeswoman Barbora Pulpanova. The agreement, which was signed in Vienna and mediated by the Energy Community Secretariat, needs to be approved by the Albanian government and parliament as well as CEZ's senior management.
“I consider the agreed-upon settlement a success especially because we will have the financial resources at our disposal significantly earlier, without having to wait a number of years for the result of the arbitration. The agreement states that the financial compensation will be arranged by a renowned European bank,” said CEZ board chairman Daniel Benes.
Albania has been interested recently in ending the dispute in order to be entitled for USD 200 million from the World Bank and other institutions to modernize its energy sector.
CEZ entered the Albanian market in 2009 when it bought a 76 percent stake in CEZ Shperndarje, an electricity distribution company, for EUR 102 million. In January 2013, Albania's energy regulatory office took away CEZ's electricity distribution license, arguing that the company had failed to supply electricity and invest into the Albanian power grid. The regulator also appointed a state official to manage the company, de facto taking it over. In May 2013, CEZ started an international arbitration against Albania.
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