Licensing for Construction of New Power Generation Plants - International Law Office

International Law Office

Energy & Natural Resources - Albania

Licensing for Construction of New Power Generation Plants

December 07 2009

Introduction
Subject of Regulation
Procedure
Authorization


Introduction

Many construction projects for new power generation plants are being developed in Albania. Some of these projects that involve the construction of hydropower plants are subject to the Concessions Law.(1)

Other projects that are not subject to this law are regulated by Article 34.1 of the Power Sector Law.(2) With regard to these projects, the Council of Ministers has approved the Regulation on Procedures for Granting of Authorizations for the Construction of Power Plants Not Subject to the Concessions Law (1701/2008).

Subject of Regulation

New power generation plants whose construction is privately financed and that are connected to power transmission or distribution networks are subject to the regulation, along with:

  • thermo-power plants;
  • cogeneration plants;
  • wind plants;
  • photovoltaic systems;
  • biomass power plants; and
  • generators for on-site use.

Any person(3) carrying out a commercial activity according to legislation may apply for authorization for the construction of a new power generation plant. The application should be submitted to the Ministry of Economy, Trade and Energy.

Procedure

An application for authorization must be in the form laid out in the regulation and accompanied by the documents(4) set out in:

  • Article 7 (documents or information for identification of the applicant);
  • Article 8 (general data and information on the plant);
  • Article 9 (specific data and information on the type of power plant); and
  • Article 10 (feasibility study).

The application must include this information or it will not be considered by the ministry. Upon filing the application, the applicant must pay the application fee.

The ministry must publish an announcement of the application on three consecutive days and in three national newspapers within 10 days of receipt of the application and payment of the publication expenses by the applicant. Interested parties may submit objections to the application to the ministry for one month after the first publication of the announcement.

The minister of economy, trade and energy establishes an ad hoc commission which evaluates applications for new power generation plants. After the expiry of the deadline for objections, the commission considers the application and provides the minister with a report, recommending approval or refusal, within three months of the initial submission.

Where two or more applications have been filed for the same site, the commission will propose the best solution to the minister.

When the commission approves an application, the minister issues a preliminary authorization which entitles the applicant to begin the process of obtaining full authorization.

Preliminary authorization allows the applicant to take measurements or perform other investment studies for the construction of the new power generation plant.

The applicant must submit to the ministry the documents provided for by Article 20 of the regulation within the timeframe set out in the preliminary authorization, such as a feasibility study (assessing technical, economical, financial, environmental and social factors), a business plan and environmental permits.

The ministry reviews the completeness and accuracy of all submitted documents within 30 days of their submission and where it concludes that all documents are complete and accurate, the ministry submits the proposal for authorization to the Council of Ministers.

The Council of Ministers reviews and approves the authorization according to its procedures.

Authorization

Authorizations approved by the Council of Ministers include, among other things:

  • the name of the authorization holder;
  • the rights conferred by the authorization;
  • the site of the new power generation plant;
  • the terms of the authorization;
  • the rights of the competent state institutions to supervise and monitor the authorization holder's construction activities;
  • the authorization holder's obligations under the agreement with the ministry on the realization of the project; and
  • the obligation of the authorization holder to pay royalties of not less than 2% of the annual power production or its equivalent value.

The authorization may also require that part of the power production plant be sold to the public supplier in accordance with applicable legislation.

The regulation sets no minimum or maximum terms for authorizations.

The authorization does not constitute or replace an environmental permit, construction permit or other permit or authorization that is necessary to construct and operate a new power generation plant in accordance with applicable legislation.

The regulation stipulates that any partial or total transfer of the authorization to a third party may be made only with the approval of the Council of Ministers. Otherwise, the transfer is null and void.

Due to recent changes to licensing legislation,(5) the National Centre for Energy Applications has been established which facilitates applications for permits and other authorizations in the energy sector. However, no further regulations on the modalities and procedures for the implementation of such new changes to legislation have yet been approved.

For further information on this topic please contact Artur Asllani or Sajmir Dautaj at Tonucci & Partners by telephone (+355 4 2250711), fax (+355 4 2250713) or email (aasllani@tonucci.it or sdautaj@tonucci.it).

Endnotes

(1) Concessions Law (9663/2006), as amended.

(2) Power Sector Law (9072/2003), as amended.

(3) The foreign person should establish a subsidiary or representative office in Albania according to the provisions of the Law on Entrepreneurs and Commercial Companies (9901/2008) and Article 4.2 of the tax law. In addition, a group of persons forming a consortium of companies may apply for an authorization. In this case, the consortium members should appoint a leader (Article 11).

(4) The documents must be in Albanian and must be original or notarized copies. Certificates or statements from other institutions should be issued no earlier than three months after submission of the application.

(5) Council of Ministers Decision on the Establishment of the National Centre for Energy Applications (913/2009).


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