[Cancelled] China Eximbank loans $126 million for Bushat hydro power station in Albania (Linked to Record ID#42282 and #66088)

Project narrative

On February 8th, 2001 Albania and the China EXIM Bank signed an export buyer’s credit contract for an export buyer's credit (loan) worth US $126 million" to construct the Bushat Hyrdropower plant along the Drin River in Albania. According to reports, the construction of the Boshat Hydropower Project is another large-scale hydropower project undertaken by China Hydropower Corporation in the form of export buyer’s credit. The total project contract amounted to more than 100 million US dollars and the construction period was 4 years. The Export-Import Bank of China provided a buyer's credit loan for the project, the loan amount was 80% of the contract amount, and the Arab side raised 15% of its own funds. The hydroelectric station was supposed to be built by China International Water and Electricity Corporation (CWE). The hydropower plant, which incorporated two generators each with a capacity of 40,000 kilowatts, was originally designed to generate 360 million kilowatt hours of electricity a year after completion. In February 2001, the Albanian national power utility (KESH) signed a construction agreement with China Water and Electricity Corporation (CWE) for the development of this project on a turnkey basis. However, the project came to a standstill in August 2001, pending further investigation of its economic viability and environmental impacts. The project as originally conceived by CWE would have been a run-of-river plant with an installed capacity of 84 MW. The scheme featured a diversion weir, a headrace canal, an aboveground powerhouse and a tailrace canal discharging to the Buna River, some 4.5 km downstream of its confluence with the Drin River. Since Lake Shkodra – a wildlife refuge shared by Albania and Montenegro – outflows into the Buna River in the stretch where the river would be diverted into the powerhouse, its level would have been affected by the project. There would also have been impacts on farm irrigation and water wells along this section of the river. This raised not only environmental and social questions, but also riparian rights issues for the two neighboring countries. In order to address these potential impacts, the IFC was retained by the Government of Albania in 2006 to structure and implement the development of this project. Through its engagement, an alternative to the existing project was developed that would address the environmental concerns. To avoid confusion with the CWE scheme, the project was renamed Ashta Hydropower Project (HPP).