A German bank loan of 50 million euros opens the way for the construction of 126km high voltage 400kV line from Elbasan in Albania to Bitola in Macedonia, designed to integrate the energy trade in the region.
Albania's government on Tuesday will sign an agreement for a loan of 50 million euros with the German state-owned development bank KfW, that will open the way for the construction of a high-voltage 400kV interconnection line with Macedonia.
The project that in Albania will start in Elbasan and will end in Bitola in Macedonia has been mulled for a long time between the two governments.
The total cost is estimated at 70 million euros. Besides the loan from KfW, funds will come from the Albanian Transmission System Operator, OST, and from the EU.
Once financial cover for the project is arranged, work in the field is expected to start at the beginning of 2017 and finish in 2018.
The new energy line with Macedonia comes after Kosovo and Albanbia finished another high-voltage 400kV power line that will enable higher levels of energy exchange between mostly lignite-powered generation capacities in Kosovo and the hydro-generation capacities of Albania.
Pajtim Bello, chairman of the Supervisory Board of OST, told BIRN that the construction of the line with Macedonia will complete Albania's plan to connect itself with its neighbours by land.
"After the high inter-connection voltage lines that we built with Montenegro, Greece, and Kosovo, Macedonia is the last one. After that, Albania will finally able to transmit and receive energy from all over the region," he stated.
Bello said the the project was important in terms of integrating regional systems of electricity, increasing energy security and enabling Albania and Macedonia to develop an energy market.
The project also creates new energy opportunities for the south of Albania. "We aim to stimulate the Fieri region - a big local energy consuming area - to returning to an energy production region. The interconnection line will enable access for energy production through gas, wind, and sun," he said.
In December 2015, when the project was first floated at a roundtable of officials of the two countries, the Albanian Energy Minister, Damian Gjiknuri, said the high-voltage line with Macedonia would not only connect up the regional energy market but create opportunities for energy transmission to Italy as well.
"The line will open up an opportunity for a connection by an underwater cable with Italy and the European Union," he stated.