CEZ Says Agreement With Albania Confirmed, to Get 100 Mln Euro

Czech energy group CEZ said on Thursday a settlement agreement with Albania, under which CEZ will get 100 million euro ($127.9 million) in total in annual installments to end an international arbitration against the country, took effect.

"On the premises of the Secretariat of the Energy Community in Vienna, the parties mutually confirmed that all conditions precedent had been fulfilled; thus, the settlement agreement took effect as made between companies of the CEZ Group and Albania in June of this year," CEZ said in a press release.

According to the agreement, the CEZ Group will receive a compensation of 85 million euro for the receivables settled and for the equity stake in the distribution company. The company has already received another 15 million euro.

The amount will be paid out in annual installments until 2018 secured by a guarantee of a renown European bank.

On the effective date of the agreement, a 76% ownership interest held by CEZ in the distribution company was transferred back to the Albanian government, the company added.

"With the settlement agreement being effective, we will be able to obtain the funds much earlier than if we had to wait many years for the outcome of an arbitration proceeding,” Daniel Benes, chairman of the board of directors and chief executive officer of CEZ, said.

In May 2013 the Czech group notified the Albanian party about its decision to turn to the International Arbitration Tribunal, in accordance with the Energy Charter Treaty, to seek compensation for damages resulting from its non-protected investment in Albanian power distribution company CEZ Shperndarje. Two months earlier, the Albanian regulator revoked the relevant license for CEZ Shperndarje and appointed an administrator that has taken over the company’s management.

CEZ Group entered the Albanian market in May 2009 by acquiring a 76% equity stake in the Albanian power distribution company. The value of the initial investment was 102 million euro.

Source:SeeNews