CEZ Files Lawsuit Against Albania

The Czech power company CEZ announced on Thursday that it has launched arbitration proceedings seeking compensation for damages incurred during its investment in an Albanian electricity company.

“The arbitration proceedings have been formally initiated by sending a notice of arbitration,” CEZ said in a statement. “However, this does not prevent a potential out-of-court settlement between the parties.”

In 2009, the Albanian state sold off 76 per cent of its shares in Operatori i Sistemit te Shperndarjes, OSSH, a company that managed the electricity distribution of up to one million consumers, with revenues of over 300 million euro per year.
CEZ bought the stake for 102 million euro and the World Bank helped smooth the sale with a $100 million partial risk guarantee in case the Czech company opted out.
However, the company, subsequently renamed CEZ Shperndarje, failed to cut losses and stem theft in the grid, forcing the government to subsidise costly imports for its state-owned power corporation, KESH.
The company has been locked in a dispute with the Albanian government over unpaid electricity bills since the beginning of 2012.
On January 21, Albania’s Energy Regulatory Agency, ERE, revoke CEZ Shperndarje’s license and appointed an administrator. CEZ has described this as an outright expropriation.

Source: balkaninsight.com