GrCF3 W2 - OSHEE Tirana substation project

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Overview

Up to EUR 22.5 million senior sovereign-guaranteed loan to Operatori i Shperndarjes se Energjise Elektrike ("OSHEE," the "Client," the "Company"), the state-owned electricity distribution and supply company in Albania. The loan proceeds will be used for investment purposes to finance the construction of the underground 110/20 kV substation in central Tirana. The original cost estimate for the substation of EUR 14.5 million, was based on a preliminary assessment. However, the final technical design, developed by a specialised external consultant, revealed an increase of ca. EUR 8 million. This increase was primarily attributable to inflationary pressures on raw material prices, enhanced project specifications, and the incorporation of final technical requirements.

Project ID 55982

Status Approved

Location

Albania

Business Sector

Energy

Notice Type

State

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Company Contact Information

Enea Karakaci
Enea.Karakaci@oshee.al
www.oshee.al
Blv. Zhan D'Ark, Tirane, Albania.

Project ID 55982

Status Approved

Location

Albania

Business Sector

Energy

Notice Type

State

Environmental Category

Approval Date

28 Mar 2025

Disclosure date

16 Apr 2025

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

Project Objectives

The project will enable OSHEE to replace an old electric substation, with a new and innovative underground substation. It will be the first underground substation to be implemented in Albania and the wider Western Balkans region. It will be the first digitally-operated substation of OSHEE. Full digitalisation is expected to improve operational efficiency, quality of supply and improve health and safety parameters. The project will incentivise OSHEE to accelerate transition to digital infrastructure and implement organisational programmes (including trainings) to support the swift implementation and transition to digital infrastructure.

Transition Impact

ETI score: 70

The expected transition impact of the Project is derived from the Green and Integrated qualities. Green transition quality is achieved by reducing technical losses in the power grid and protecting the substation from extreme weather events, corrosion and vandalism. The use of proceeds will support an electricity system where the grid emissions factor is below 100 gCO2e/kWh, which is the case in Albania due to its nearly 100% hydro-based power generation.

The Integrated quality is achived by introducing an innovative technology that improves the quality of the relevant infrastructure. By replacing an over-the-ground substation with an underground one, the project will utilise the loan proceeds to fund the modernisation of OSHEE's critical infrastructure, specifically targeting the improvement of system reliability and operational flexibility. This will enable OSHEE to achieve significant reductions in transmission losses, bringing its performance closer to international best practices.

Client Information

OPERATORI I SHPERNDARJES SE ENERGJISE ELEKTRIKE SH A

OSHEE is the 100% state-owned electricity distribution and retail supply company of Albania. OSHEE supplies all Albanian regulated customers and acts as the supplier of last resort for unregulated customers. OSHEE is responsible for the distribution network and acts as the offtaker of electricity produced by most independent power producers ("IPPs") in Albania. OSHEE's primary supplier is KESH who has a Public Service Obligation (PSO) to supply OSHEE with the necessary amount of energy to satisfy regulated demand.

EBRD Finance Summary

EUR 22,500,000.00

Total Project Cost

EUR 22,500,000.00

Additionality

The Bank is additional due to the offered financing structure. The EBRD offers terms and conditions that are not available from commercial sources, but necessary to finance the project, while EBRD's support will strengthen OSHEE's operational and human capital capacities.

Environmental and Social Summary

Categorised B (ESP 2019). Environmental and social issues associated with the construction of a state-of-the-art underground 110/20 KV distribution substation in central Tirana are site specific and can be readily assessed and mitigated. Environmental and Social Due diligence (ESDD) initiated internally by means of ESDD questionnaires and meetings with Client's management and continued with the support of an external consultant conducting an environmental and social assessment of the project and a review of the E&S capacity of the Client to develop the project in line with EBRD performance requirements.

OSHEE is an existing Client of the Bank, with a liquidity loan for general working capital needs provided (as part of the Bank's Covid-19 response) in 2021. The existing ESAP was developed to ensure alignment between OSHEE's ongoing operations with the Bank's Environmental and Social Performance Requirements, a key component of which was the establishment and implementation of a formalised, integrated Health and Safety and Environmental and Social management system (HS-ESMS) and provision a senior H&S manager and environmental specialist responsible for operational activities. The system has since been developed with consultant support, but implementation is yet to commence. Implementation of other ESAP actions related to the on-going operations, including allocation of the new H&S manager and those related to PR2 and PR10 remain behind schedule.

The concept design for the new substation has been reviewed and impacts due to project location will be mostly related to traffic management, noise, air pollution, vibration, land, life and fire safety, EMF, public and occupational health and safety, and contractors' management, which are expected to be site-specific and managed through good design, construction, and operational practices. An SF6 replacement study was developed, and the new substation will adopt an environmentally friendly design with GIS SF6 free solution or a blended solution with minimal greenhouse gas mixture to ensure lower global warming potential as included into the project tender documentation. A Non-Technical Summary and SEP have been developed and will be disclosed by OSHEE. An ESAP has also been developed focused only on the construction and operation of the project and will be agreed with the Client prior to signing. The other actions related to management of E&S issues at Client's corporate level are included into the OSHEE Sustainability Project (Project ID 55236).

TC support will be provided to support overdue ESAP items related to PR2, 4 and 10 and the required implementation of the HS-ESMS, as part of the OSHEE Sustainability Project. In addition, the ESAP will include the development of a corporate land acquisition framework to manage land acquisition in accordance with national and EBRD requirements, including the implementation for the substation project. The EBRD will monitor the project through review of regular Environmental and Social reports and monitoring visits as required.

Technical Cooperation and Grant Financing

Not applicable.

Company Contact Information

Enea Karakaci
Enea.Karakaci@oshee.al
www.oshee.al
Blv. Zhan D'Ark, Tirane, Albania.

Implementation Summary

PSD Last Updated

16 Apr 2025

Understanding transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with the EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and its associated Environmental and Social Requirements (ESRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the ESRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation, and to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about the environmental and social (E&S) performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD also requires its clients to disclose information, as appropriate, about the risks and impacts of projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all of the Bank's activities in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The EBRD believes that identifying and resolving issues in the project assessment and approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts andhelps to monitor integrity risks in projects post-investment.

OCCO is further responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, either within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. OCCO will follow-up all matters reported. It will review all matters reported. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP, which entered into force on 1 January 2025, sets out how the EBRD discloses information and consults with its stakeholders to promote better awareness and understanding of its strategies, policies and operations. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (for example, through the client’s project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the mechanism is: to support dialogue between project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or the project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate and how to submit a Request for review. Alternatively, contact IPAM by email at ipam@ebrd.com for guidance and more information on IPAM and how to submit a request.

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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GrCF3 W2 - OSHEE Tirana substation project

Overview

Project timeline

Company Contact Information

Project Description

Project Objectives

Transition Impact

Client Information

EBRD Finance Summary

Total Project Cost

Additionality

Technical Cooperation and Grant Financing

Company Contact Information

Implementation Summary

PSD Last Updated

Understanding transition

Business opportunities

General enquiries

Environmental and Social Policy (ESP)

Integrity and compliance

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)