Overview

SCF is considering a USD 45million investment in a Utility Scale Solar (“project”) in Albania that aims to repurpose 220 hectares of land that has been deemed unsuitable for agriculture due to high salinity into a high productivity energy generation site.

Albania has a widely underexplored potential for solar photovoltaic (PV) infrastructure. In addressing this, the country has begun exploring expanding solar PV projects twhich will be located west of the city of Fier.

The project is planned to scale up to 150 MW capacity over 16-18 months, with 280 000 Solar Modules and a Single Axis Tracking Structure, each with a capacity of 540-Watt Peak.  A second (optional) phase is being considered to construct an additional 40MWac as well.

The Challenge

At over 1,500 kWh/m2 a year, solar radiation is very high across most of Albania. However, Albania currently imports 30-60% of its energy due to a lack of solar PV infrastructure development, while hydropower currently represents about 95% of Albania’s electricity generation capacity. While the UNDP continues to support development of solar infrastructure in Albania, current solar generation in the country sits only at 1%, while a more diversified renewable energy portfolio would support the country’s energy security against climate change and  energy supply shocks.

SCF’s Involvement

1. Proposed Investment

SCF is evaluating an investment of up to $45m to serve as capital and funding partner for the full development, construction, and operation of the Solar PV Project.

2. Technical Assistance

The project has received Technical Assistance from the SCF for a prefeasibility study in grid emission factor, based on CDM’s Tool 07 to quantify the emissions factor in Albania. The tool requires to calculate the combined margin (CM) as a weighted average of the operating margin (OM) and the build margin (BM). The operating margin refers to the GHG emissions of existing power plants and the build margin refers to the GHG emissions of prospective power plants.

The information used for the calculation of the emission factor in Albania was taken from two main official sources of the country, one of them are the annual reports of 2019, 2020 and 2021  where are presented in detail the data on the progress of the Energy and Natural Gas sectors, as well as the comparison of some of the main indicators for each year, required information on the operational security of the network, the expected balance of demand and supply of electricity in the domestic market, the expected level of demand, production capacity, among others.

The Prefeasibility study found that:

• While Albania’s reliance on hydropower makes their simple emission factor of 0, when accounting for energy imports from Montenegro, Kosovo and Greece, Albania’s energy factor was determined to be 0.289.

The project is planned to receive further Technical Assistance from SCF through a full feasibility assessment and ESIA, with the objectives of:

• Ensure that all ecological risks are identified.
• Complete stakeholder consultation in accordance with Gold Standard requirements.
• Assess climate risks at the site.
• Allow for the preparation of a comprehensive Environmental Social Management Plan (ESMP) to ensure that identified project risks are managed appropriately.

The investment described above is a potential pipeline investment of SCF.  There can be no guaranty that the investment will be completed on the terms described or implied above, that SCF will be able to successfully invest in such investment or that impact targets will be achieved.