Czech power utility CEZ has signed a settlement agreement with Albanian counterparty under supervision of Energy Community Secretariat. According to the agreement CEZ, after fulfillment of conditions precedent, will get a total of €100m in annual installments (i.e. the amount similar to initial investment into purchase of Albanian distribution company). Conditions for ending of arbitrage are part of the agreement. According to the agreement, CEZ shall receive a compensation of €95.5m as payment of receivables and transfer of shares in CEZ Shperndarje, the sole electricity distribution company in Albania. This is in addition to €4.5m already received by CEZ. The amount will be paid in annual installments until 2018.
ČEZ entered Albanian market in 2009, when it acquired 76% of OSSH, the electricity distribution company (renamed CEZ Shperndarje). In 2012, tensions escalated between the Albanian Government and ČEZ, since ČEZ accused the Government of trying to shift the high electricity import costs onto the group. Meanwhile ČEZ was accused of insufficient investments in the distribution grid and insufficient power imports, leading to US$1bn in budget losses. In December 2012, ČEZ offered its assets for sale and its distribution licence was revoked in January 2013 (operations are carried out by an administrator) and started an international arbitration procedure.
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