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Czech power giant CEZ starts arbitration against Albania

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(GlobalPost/GlobalPost)

Czech state-run power giant CEZ said on Thursday it would start an international arbitration lawsuit against Albania, claiming the Balkan country had failed to protect its investment there.

Albanian authorities stripped CEZ of its local distribution licence last month, blaming it for severe electricity and water shortages in several regions of the country of 3.2 million people.

Tirana has blamed CEZ for the blackouts and severe water shortages, while CEZ said it was forced to cut power and water over unpaid bills.

"CEZ today officially informed the Albanian government about its plan to start an international arbitration lawsuit over an unprotected investment in the power distributor CEZ Shperndarje," central Europe's largest utility said in a statement.

"The CEZ group expects the step to cover the damages it is entitled to receive in line with international law," CEZ added, citing a Czech-Albanian agreement on investment protection.

CEZ paid 102 million euros ($139 million) in 2009 to take control of Shperndarje, Albania's monopoly electricity distributor.

The Czechs claim Shperndarje runs at a major loss, with nearly half of consumers not paying their bills, including state institutions.

It claimed early last year it had lost $190 million, accusing the Albanian authorities of refusing to allow it to increase electricity prices and collect unpaid bills.

The Albanian government in turn accused CEZ of having failed to invest in the energy sector and hampering electricity imports and distribution.

Traded on the Prague and Warsaw stock exchanges, CEZ is also central Europe's biggest public company.

It operates at home as well as in Albania, Bulgaria, Germany, Hungary, Poland, Romania, Slovakia and Turkey.

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http://www.globalpost.com/dispatch/news/afp/130207/czech-power-giant-cez-starts-arbitration-against-albania