All systems go for largest Albanian solar field
International cooperation has led to a major solar project in Albania that will help the country achieve its climate goals
Located on the east of Albania’s Adriatic coastline, the protected Karavasta lagoon is a wetland of international importance and an abundant habitat for wildlife, including the Dalmatian pelican.
Surrounded by deciduous forest that makes up the Divjakë-Karavasta national park, Karavasta lagoon is the biggest in Albania and the largest to be fed from the Mediterranean.
Just a few miles away from this natural gem will soon be another asset for Albania – one that harnesses the power of nature to improve everyone’s lives.
Karavasta’s neighbouring (unprotected) land will soon be home to Albania’s most ambitious solar field yet – a 140MWp renewable energy project designed to move the country away from its reliance on fossil fuels.
"We strongly support Albania’s commitment to become a net energy exporter by 2030 and its strategy to diversify resources focusing on the renewable energy fields."
IAlessandro D’Oria, CEO, Intesa Sanpaolo Bank Albania
A landmark solar project
The €135 million Karavasta solar project, built by French company Voltalia, is co-financed by Voltalia, the International Finance Corporation (IFC), European Bank for Reconstruction and Development (EBRD), Intesa Sanpaolo Bank Albania and Privredna Banka Zagreb via a €99 million syndicated loan facility.
The landmark project will be built to harness the sun’s energy using a sun-tracking structure and two-face panels.
The project will enable an innovative hybrid commercialisation strategy – selling 50% of energy production to a state-owned utility at a fixed price and selling the rest at market prices – combined with an energy price hedging instrument to avoid price volatility.
Constantin von Alvensleben, Voltalia's Manager for Albania, says: “Given the high installed capacity of 140MWp, as well as the short implementation time of one-and-a-half years, this project has caused a boom for solar energy in the country.
“It is a great moment for all stakeholders, including the Albanian government, Voltalia as developer, borrower and contractor, as well as the banking consortium consisting of EBRD, IFC and Intesa Sanpaolo.”
Alessandro D’Oria, CEO of Intesa Sanpaolo Bank Albania, adds: “We strongly support Albania’s commitment to become a net energy exporter by 2030 and its strategy to diversify resources focusing on the renewable energy fields.
“This financing presents the capabilities of our team to manage successfully international partnerships in financing complex projects, in collaboration with ISP Group and PBZ.”
"This project represents a great example of the synergy of the Intesa Sanpaolo network and the wider Intesa Sanpaolo business goals."
Giuseppe Ferraro, Head of the Corporate SME Department of the International Subsidiary Banks Division.
Making use of natural resources
Albania is in a great position to take advantage of the sun. It averages 240-300 days of sunshine per year. Much is exposed to high solar radiation – up to 1700kWh/m2 per year. In clear weather, every square metre may absorb about 2200 kWh per year – about enough to power a medium-sized home.
Decarbonisation is not a new agenda in Albania. In fact, the country has one of the largest shares of renewable energy in its energy mix in south-east Europe.
Ninety-five per cent of the country’s renewable, domestically produced electricity comes from hydropower, which harnesses the natural energy of Albania’s more than 152 rivers. But as soaring global temperatures lead to low rainfall and receding water levels, to rely entirely on hydropower leaves the country vulnerable to an overreliance on imported energy.
The annual demand for energy in Albania is expected to increase by 77% until 2030, and the production of electricity from large hydropower plants is expected to decrease by about 15%-20% in the same period.
Finance leads the change
Albania’s National Energy Strategy places an emphasis on diversifying renewables, as well as an unconditional emissions-reduction target of 20.9% by 2030.
However, the UN Economic Commission for Europe highlighted in 2021 that Albania still faces core challenges in making this happen. One of the challenges was in de-risking the financing of large-scale renewables projects, to inspire confidence and stimulate international investment.
After commissioning, the Karavasta field is expected to generate more than 265 gigawatt hours of electricity per year. This will be accompanied by reductions in greenhouse gas emissions of approximately 96,500 tonnes of CO2 equivalent per year – or 9.5% of the carbon dioxide emitted from the industrial sector in Albania.
It will also represent another step forward for the international cooperation of finance to help meet climate goals.
"We hope that this transaction will serve as an example for other private renewable energy projects to follow, especially in the solar sector. Solar energy can be used for a variety of purposes without generating greenhouse emissions and depleting further our natural resources."
Vedrana Jelušić Kašić, member of the management board, PBZ
With a €29 million ticket, Intesa Sanpaolo Group is the only commercial banking group involved in the transaction.
Intesa Sanpaolo Bank Albania has taken roles in the syndicated loan of the onshore account bank and onshore security agent.
PBZ has also been entrusted the role of the Administrative Agent, Payment Agent and Offshore Security Agent on the €99m long-term syndicated loan. “We hope that this transaction will serve as an example for other private renewable energy projects to follow, especially in the solar sector,” says Vedrana Jelušić Kašić, a member of the management board at PBZ.
“Solar energy can be used for a variety of purposes without generating greenhouse emissions and depleting further our natural resources.”
“This project represents a great example of the synergy of the Intesa Sanpaolo network and the wider Intesa Sanpaolo business goals,” says Giuseppe Ferraro, Head of the Corporate SME Department of the International Subsidiary Banks Division.
“The Subsidiary Banks Division aims to co-operate on projects like this in the future, where finance can mobilize change and circular economy goals.”