04 December 2008 Tirana _ Albania has signed two deals worth more than €2 billion with Italian firms to produce power and export it to Italy in a move to ease its chronic shortages and help Italy cope with a power deficit.

Italy's Prime Minister Silvio Berlusconi and Albania's Prime Minister Sali Berisha watched as two of the biggest deals were signed in what marks a revival of cooperation between Albania and Italy, its European Union neighbour across the Adriatic.

The €1 billion euro re-gassification project with the Falcione Group involves importing liquid gas that will be turned into gas to fire a power plant in the southern area of Seman, near Firer, for both the Albanian and the Italian market via undersea connections.

The €1.2 billion wind farm with the Moncada Construzioni, billed by some as the biggest one in Europe, is planned to be built south and south-east of the western Albanian city of Vlore by Italy's Moncada Construzioni.

Ministers also signed a €160 million agreement with Italy's Todini Construzioni Generali to build a cement plant and a joint agreement for development cooperation in what marks the crowning of the biggest projects between the two neighbours despite some protest from environmentalists, who see them as a new form of colonialism.

Over the past two years, Albania has been hit by an acute energy crisis, with regular power cuts throughout the country, including the capital Tirana.

Almost all of Albania’s domestically-produced electricity is generated by hydro-power plants, which are badly affected by droughts, but even when rain is plentiful, the obsolete distribution grid causes major problems.
 
International organisations that monitor the Albanian economy, including the International Monetary Fund and the World Bank, have expressed concern that the energy crisis could have an adverse effect on the country’s robust economic growth, which has been averaging close to 6 percent per annum since 2006.