The European Bank for Reconstruction and Development (EBRD) said it is considering providing a loan of up to Euro 9.75 million to Albanian power corporation KESH to support the construction of a floating solar PV plant on the surface of KESH's Vau i Dejes hydropower plant reservoir with an installed capacity of 12.9 MW.

The loan has passed concept review, the EBRD said in a statement earlier this week.

The electricity produced by the solar plant will be sold on the non-regulated electricity market, the EBRD said, adding that the project will support the implementation of the first-of-a-kind floating technology solar plant in Albania and in the Western Balkans region and will promote the further use of the floating PV technology to increase the region's solar capacity through the efficient use of existing hydro reservoirs.

“At the same time, the project will strengthen KESH's operational and financial performance through reduced reliance on hydro revenues and due to the floating technology's positive impact on the water levels of the existing reservoir,” the EBRD added.

According to the bank, the transition impact arises from delivering climate mitigation benefits through the construction of 12.9 MW of additional renewable energy generation capacity in Albania and by bringing a novel green technology to the country. “The project will be built with minimal land utilisation and help reduce evaporation from water surfaces resulting in overall efficient use of resources.”

“In addition, the project will strengthen the financial resilience of the main state-owned utility company in the country,” the EBRD said.

The lender also said that the borrower will be a special purpose vehicle incorporated in Albania for the sole purpose of developing, constructing and operating the project. The borrower will be ultimately 100% owned by KESH.

KESH is a leading electricity generation company of Albania and the owner of the country's three major hydropower plants accounting for the majority of the domestic electricity production.

“The EBRD offers terms and conditions and a tenor that are not available from commercial sources, but necessary to finance the project, while EBRD's existing relationship with KESH provides comfort to the client to invest in this new technology,” the bank noted.