AATDA AL Work on Corporate Governance Extended 

13/11/2007
The AATDA AL has been actively engaged in activities related to improving corporate governance for the past year. Activities have included a series of roundtables related to policy formation and information sharing; training in corporate governance for selected participants; and a corresponding public awareness program, which has been extended until January 31.

This program seeks to introduce corporate governance as an essential component of reform in Albania. A basic assumption of the effort is that effective corporate management, along with improved transparency, law enforcement, business ethics, and easy access to credit, will improve business investment and political stability. Click here.

 
Albania faces electricity crisis
16/08/2007
TIRANA, Albania -- The country is on the brink of a serious electricity shortage due to the summer drought, according to the Ministry of Economy.  AFP quoted a Ministry spokesman on Wednesday (August 15th) who said that water levels in dam lakes have dropped by 85%, forcing the government to introduce restrictions on electricity consumption by households, government institutions and factories.  Workdays are shrinking from eight to five hours in some cases, or shifts are moving to evening or nights when electricity consumption is lower.  Albania needs about 18m kWh of electricity daily.  The country produces 5.5m kWh and imports more than 6.5m kWh.  Aging hydro electricity plants, built during the communist era, are the only source of electricity in Albania, though foreign investment may be picking up. (AFP, BTA, Darik - 15/08/07)


Foreign investors interested in Albanian oil
15/08/2007

By Jonilda Koci for Southeast European Times in Tirana 

Two foreign investors have announced plans for further investment in the search for oil and gas in Albania.  The first, Britain's MedOil, has obtained exploration and development rights for hydrocarbons in the Ionian Sea.

At the same time, the international firm Streamoil Gas Limited has signed a contract with the Albanian government regarding the development and production of hydrocarbons at several fields in the country.

Both deals were approved at a cabinet meeting on August 8th.
"These two companies, together with other operating companies in the country, have drastically changed the production of oil in the country, reaching 500,000 tons last year," said Prime Minister Sali Berisha. "We expect a further increase this year."
MedOil will be conducting its operations in an area ranging from Karaburun Peninsula to the southernmost Albanian town, Saranda. Official statistics forecast that 1.8 billion barrels of oil reserves can be found. Under the contract, the government will receive between 10% and 60% of the oil revenues, based on the depth of drilling. Analysts estimate that the likely percentage will be between 10% and 12%.

The British firm is investing round $20m in the project over the next seven years.  It has the contractual right to exploit the source for 20 years starting from the date oil is found.
Streamoil, meanwhile, will be drilling at the Ballsh-Hekal, Gorisht-Kosur and Cakran-Mollaj fields, as well as at Delvina. The government expects Albpetrol, the state owned company, to triple its income as a result of the Streamoil deal.

There are other foreign investors in the oil industry. Bankers Petroleum, a Canadian-based firm, has been drilling at the Patos-Marinza field since 2004.  Bankers has increased its production level to over 4,400 barrels per day at the end of 2006, compared to 600 barrels per day since it took-over the project in July 2004.

Another company, Occidental Petroleum, has been prospecting for oil and natural gas at Mount Shpiragu, 120km south of the capital, since 1991.  The search has proved fruitless so far.
Berisha says he is confident about the overall level of foreign direct investment in Albania.  "These last weeks we signed several contracts with foreign investors….Their engagement is a clear evidence of foreign companies' focus and determination to invest in Albania."

Albania assigned first sovereign ratings by Moody's
16/08/2007
The country now plans to finance part of its national debt through foreign loans.

By Jonilda Koci for Southeast European Times in Tirana 

Albania is making the transition from an isolated, administered economy to a market one, according to Moody's Investor's Service. Earlier this summer, the international ratings agency gave the country its first-ever sovereign ratings -- Ba1 for foreign-currency bonds and a B1 for the government's debt obligations.
Albania also received a B2 for foreign currency bank deposits, A3 for local currency and Baa1 for local currency bank deposits. Moody's said the overall ratings assigned to Albania carry a stable outlook. Albania, together with Belarus, were the only countries in the region that did not have a sovereign rating.

"Obtaining a credit rating ... reduces the information gap and firmly places Albania on the world investors' map, creating further incentives for both foreign direct investment and portfolio investments," says Ann Margaret Westin, the IMF's representative in Tirana.

Sovereign ratings are used by governments to raise capital to finance national debt. They allow the government the opportunity to secure additional funds at more competitive prices.
The Albanian government says it now plans to issue Eurobonds in order to finance part of its debt. "We are interested in ranking our country, so that we can benefit from foreign loans at lower interest rates," said Finance Minister Ridvan Bode, during a meeting with Moody's experts in Tirana.

Based on the Albanian government's economic and fiscal plan for the next two years, approximately 100m Eurobonds are likely to be sold into the market. The aim is to gradually substitute domestic debt with foreign debt by 5% to 10% through the use of Eurobonds. "The risk assessment will release our country out of anonymity and assumed maximum risk," says Milva Ekonomi, the executive director of Agenda, an Albanian think tank.
However, Ekonomi adds, it is crucial that the amount of foreign debt financed by Eurobonds be watched closely.

In an effort to maintain control of foreign debt, the IMF and Central Bank will supervise the borrowing process. As Westin confirms, "within the IMF programme, we do have limits on external borrowing that will put a ceiling on how much the government can issue at this stage."
According to some financial experts, the exchange risk of using Eurobonds is a possible weakness in future transactions. The lek is the Albanian national currency, while the debt would be issued in Euros, they point out.

AATDA Creates New Foundation for Albanian Support

The Board of Directors of AATDA has created a new mechanism, The Albanian American Trade & Development Foundation (AATDF), which is designed to support AATDA activities that aim to assist Albania in its social, cultural and economic development, as well as help fund our efforts to assist the people of Albania. "Our organization has evolved substantially since its early days," said Lou Elias, President of AATDA. "Originally a group with trade development in mind, over the years we have grown to include many non-business activities that relate to Albania's well being."

The new AATDF will support current efforts in Albania focused on developing an improved business environment being carried out by the AATDA in Albania.  These include projects promoting improved corporate governance, the rule of law, and a streamlined business permitting and regulatory regime.  Still, more activities are under development and will be announced through this web site.  Donations are now being accepted.  For further information, please contact us at aatda1991@yahoo.com
 

AATDA AL Corporate Governance Project Reaches Mid-Point -- Shows Excellent Progress

In November, AATDA launched an important initiative to enhance Albania’s business environment by improving corporate business practices and strengthening the legal and regulatory framework in which Albania’s private sector exists. Well underway at the midpoint of the one-year project, AATDA has held meetings with key corporate governance stakeholders and business organizations throughout Albania to introduce the project and its concept, and has conducted a national survey (February-March) of 120 companies and stakeholder groups that is being used to assess the current state of corporate governance in Albania.  

As a result of the survey, a series of Roundtable events are being held to discuss the survey results and map out plans for improving corporate governance. The first Roundtable was held on April 24 in Tirana gathering 28 leaders from the banking, insurance and financial services sectors.  A second Roundtable was held in mid-March with 25 members of government agencies and business organizations including the Tirana Stock Exchange, the Share Registry Center, the Ministry of Economy and Trade and a number of Chambers of Commerce from throughout Albania.   

AATDA AL is also conducting a public awareness campaign through publication of articles in the press, and is developing a television program to be aired on the subject.  Also in process of development is the issuance of two publications, including a reference guide for shareholders, business associations and chambers, and a research report on the capital market in Albania which is intended to provide a roadmap to capital access for Albanian companies. As a result of the project, a plan for development of improved corporate governance will be formulated, articulated, and implemented by group advocacy by AATDA and its network of stakeholder organizations. It is expected that the project will be completed by the end of October. It is funded by the Center for International Private Enterprise (CIPE), an affiliate of the U.S. Chamber of Commerce.

For more Information on Corridor VIII, please visit:
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