The government will receive a Euro 40 million loan for the rehabilitation of the Fierza hydroelectric power plant, one of the most important power plants in the country.

The loan agreement with the German development bank KfW has been sent in the Parliament for approval, while the accompanying report explains that this financing extends the previous agreement of 2022, which contained the original KfW loan and accompanying grants.

According to the report, the new loan of Euro 40 million, together with a grant of Euro 1 million, will enable the inclusion of additional electromechanical components, the improvement of real-time monitoring systems and the optimization of equipment for higher operational efficiency. These interventions have been identified as necessary after a detailed verification, which highlighted that the initial project specifications did not capture all the technical needs of the plant.

The report also states that these interventions will contribute to extending the life of the HPP for at least 30 years and increasing its overall efficiency, in line with national strategies for sustainable energy, Scan TV reported on Tuesday.

Meanwhile, the lack of complete interventions so far has had significant consequences. According to the data included in the accompanying report, the hydropower plant's production capacity has been reduced by about 4% per year, corresponding to a loss of 53,123 GWh per year, which translates into a loss of revenue of about 2,656 million euros for the electricity sector. This negative economic impact is directly related to the failure to fully rehabilitate the turbines and main energy equipment.

In early 2026, Albania’s hydropower sector is at a crossroads. While the country remains one of the few in the world to generate nearly 100% of its domestic electricity from hydro, the government is aggressively moving to break this "single-source" dependency to mitigate climate risks.