Public institutions and entities governing the sector – EITI Report 2013-2014

Public institutions and entities governing the sector – EITI Report 2013-2014

Public institutions and entities governing the sector

EITI Report 2013-2014



Figure 1- Key public institutions and reporting lines

UntitledMinistry of Energy and Industry1 (“MEI” or “Ministry”) is the Ministry responsible for making public policy and monitoring the implementation of legislation in the energy and resources sector. It operates through its directorates responsible for the development of public policies in the petroleum, mining, hydro-energy, renewable energy sources and energy efficiency, and technical and industry standards.

MEI is responsible for granting exploration and production licenses in the mining sector for evaluating applications for petroleum agreements and concession rights for the construction of hydropower plants in Albania. Petroleum agreements and hydro-energy concessions are approved by the Council of Ministers.

The mission of the Ministry in the energy sector is to promote constant and sustainable economic development through:

  • encouraging private investment, domestic or foreign, in the energy sector with an attractive legal climate for these investments; and
  • development of market reforms in the energy sector to achieve national objectives for EU integration and the development of a Regional Electricity Market.

MEI is primarily financed by the State Budget in accordance with Budget law. Revenues generated by the energy sector include service tariffs and license fees. The Ministry operates through the State Treasury System, where revenue collected and disbursements for expenditure are pooled in the State’s joint bank accounts. MEI publishes in its website financial information on expenses by nature and program in the following link:

MEI annual accounts are audited by the Supreme State Auditor as part of its activities.

In reaching its primary mission in the energy and resources sector, the Ministry is supported by the National Agency of Natural Resources and the Albanian Geological Survey.

State-owned entities in the energy and resources (SOEs)

MEI representatives chair the Board of Directors of the State owned entities in the energy and resources sector. The Ministry of Economic Development, Trade, Tourism and Entrepreneurship (“MEDTTE”) responsible for economic policies holds shares in the sector through ownership of:

  • Albpetrol Sh.a (100% of shares) – upstream oil and gas operations
  • Korporata Elektroenergjitike Shqiptare Sh.a (“KESH”) (100% of shares) – hydropower generation
  • Operatori i Sistemit te Transmetimit Sh.a. (“OST”) (100% of shares) – power transmission
  • Operatori i Shperndarjes se Energjise Elektrike Sh.a. (“OSHEE”) (100% of shares) – power distribution

In addition, the State retained 15% of the shares in ARMO Sh.a. engaged in oil refining activities.

akbn National Agency of Natural Resources (NANR or AKBN) is established as a public entity reporting to the Minister responsible for Energy pursuant to CMD no. 547 dated 9 August 2006, amended. Its main purpose is to develop and supervise the rational deployment of natural resources in the mining, petroleum and energy sector based on governing policies in force.

  • In pursuing its mission AKBN is responsible and performs the following functions concerning the mining, petroleum and energy sector:
    • Contributes to the development of the strategies and governing policies;
    • Performs technical review to the studies and projects implemented in the sectors;
    • Promotes national oil, gas and mining resources and renewable energy resources
    • Negotiates and monitors the implementation of petroleum and mining agreements;
    • Monitors the implementation of the concessionary agreements in the hydro-energy sector;

    Administers the data produced by the sectors and compiles the national and regional energy balance in accordance with EUROSTAT2 requirements and the International Energy Agency3

AKBN is headed by the Board of Directors staffed by seven member including the Chairman and the Executive Director. All members are nominated by the Minister of Energy and Industry. The entity performs its public functions through the directorates of petroleum, mining, hydro-energy and renewable energy, primary responsible for the activities in each sector.

AKBN is primarily funded by:

  • The State budget for specific projects implemented in the sectors of petroleum, mining, hydro-energy and renewable energy;
  • Tariffs applied for the services performed throughout license-application process and inter-institutional projects;
  • Signature and training bonuses derived from petroleum agreements;
  • Settlement of performance guaranties derived from non-compliance with petroleum and mining licenses;
  • Sales of the State interests in petroleum agreements;
  • Banking interest;
  • Donations etc.

AKBN makes no payments to the State budget, any surplus of annual income over expenditures, are carried forward in the next fiscal year. AKBN administers its own bank accounts where deposits its surplus funds. AKBN’s annual accounts are audited by the Supreme State Auditor as part of its activities, however AKBN’s annual financial accounts were not made available for public access and review at the date of this report.

shgjshShërbimi Albanian Geological Survey (AGS or SHGJSH) represent the oldest public institution acting as scientific counselor in accordance with Law no. 8366, dated 2 July 1998 “On Geological Service”, amended by law no. 9221, dated 15 April 2004 and Law no. 10227, dated 4 February 2010. In 2015 the Albanian Parliament approved a new law no 111/2015 “On Albanian Geological service”, which abrogated the first law. SHGJSH is responsible for several scientific studies on hydrocarbons, mining, quarry, and hydro-energy etc. The entity publishes projects implemented or under implementation in its website: Main projects undertaken in the energy and resources sector include:

    • Compilation of the digital maps for the hydro-energy and mining and quarry sectors;
    • Assessment of mining opportunities in the area of Qafe Mali – Perlat;
    • Assessment of the oil opportunities in the region of Shtepez in North Delvina;
    • Monitoring use and management of the groundwater and rivers and basins, etc.

Among other duties, SHGJSH is responsible for promoting and negotiating exploration licenses in mining and quarry sector, and for monitoring the project implementation under each exploration license granted.SHGJSH is financed by the State Budget, service fees and tariffs for technical reviews and geological surveys.

ereAlbanian Energy Regulator (ERE)  is an independent public body responsible for the regulation of activities in the power and natural gas sector, organized in accordance with the provisions of Law No. 9072 dated May 22, 2013 “On power sector”, amended, and Law No.9946 dated June 30, 2008 “On gas sector”.  In 2015 the Albanian Parliament approved a new Law no. 102/ 2015 dated 23 September 2015 “On natural gas sector”, which abrogated the first law.

ERE is the competent authority for issuing licenses for the generation, transmission, distribution, supply and trading of power. The Body is directed by a Board of Commissioners appointed by the Albanian Parliament.

ERE is responsible for:

  • Establishing rules and requirements for licensing, transfer and withdrawal of licenses in power generation, transmission, distribution, supply, trading of electricity and gas;
  • Establishing wholesale and retail sales tariffs, as well as the terms and conditions attached to power services;
  • Protection of the energy consumers’ interests;
  • Resolution of disputes between licensees and customers and between the licensees;
  • Maintaining the balance between the interests of licensees, consumers, state and other participants in the energy sector;
  • Promotion of competition in the energy sector;
  • Establish market rules, grid codes and other codes governing the activities of the licensees in the energy sector.
  • Determination of tariffs for all renewable energy sources (RES) in general and power generation in particular;

ERE is financed by regulatory license fees and regulatory tariffs paid by the licensees in generation, transmission, distribution, trade of electrical power and licensees in transmission and distribution of gas etc.

ERE reports annually to the Albanian Parliament “On Power Sector Situation and ERE’s Activity”. The report approved by the Parliament, is published in the ERE’s website:  within three months from the end of the reporting period. ERE’s annual financial statements are published in ERE’s annual report. ERE annual accounts are audited by the Supreme State Auditor as part of its activities.