Energy is in high demand in Albania and existing hydro-power plants provide an inadequate supply for the increasing demands of the growing population. The sector is currently being privatized and the government is determined to solve energy problems by offering concessions for the construction and operation of small and medium hydro-power plants in all of its major rivers and not only. This presents an ideal situation for foreign investors to step in and expand their business in Albania’s energy sector with future potential for export to other countries in the region. Until recently, 98% of total energy production in Albania was generated through its hydro resources but the sector is now diversified.
Hydro resourcesMain Albanian Rivers are: Drin River, Devoll River, Vjosa River, Mat River and Osumi River. So far, plenty of hydro – power stations have been given in concession but according to studies there is still capacity for additional hydro-power plants:
• The Drin river has the capacity for one more hydro-power plant that could eventually be located in Skavica and could have a capacity of 350,000 kW.
• According to feasibility studies conducted so far there are potentials for hydro-energetic investments in the Osumi River.
• There are currently two hydropower plants on the Mat River, in Ulez and Shkopet. Good potentials exist for energy production in the rivers of Mat, Fani i Madh and Fan i Vogel.
The government is currently accepting proposals for the development of several small hydropower plants throughout the country.
The advantages of doing so include:
• A 35 year BOT concessionAlternative energy and renewable energy sources
Situated in South Eastern Europe in the West of Balkan Peninsula, Albania encompasses an area of 28,748 square kilometers. From the geographical position and natural conditions point of view, Albania represents a boundary line of about 1094 km long, out of which 657 km are ground border, 316 sea border, 48 km river border and 73 km are lake borders.
The importance of achieving sustainable economic and environmental development in Albania is an evident but certainly not an easy goal to fulfill. All possible alternatives as Wind, Solar or Biomass energy can help.
Albania belongs to the subtropical belt (zone) and is comprised in the Mediterranean climatic zone. It has a relatively short and soft winter and a hot, dry summer. The climate of Albania varies widely from one zone to the other, and it has got huge contrasts in temperature, precipitation, sun, air humidity, etc. Solar radiation varies from 2731 hours a year in Xare, Sarande, 2246 hours a year in Vlore, 2560 in Tirane, 2246 hours a year in Peshkopi and 2046 hours a year in Kukes. The precipitation in Albania amounts to 1430 mm a year decreasing from west to east.
Biomasses
Biomass energy as by using “natural materials like trees and plants, corn, crops etc” to produce electricity, is the other most common form of renewable energy which Albania is strongly promoting, as another opportunity to provide enough electricity supply.Albania is a country which traditionally, is rich in natural resources such as: wood, corn stalks, corn cobs and seed corn from farms, trees etc. All these available sources of bio energy including: agricultural and forestry residues, municipal solid wastes, industrial wastes; are additional valuable opportunities in Albania, for exploitation by you investor, in regards to energy production.
You might wish to read the Albinvest publications about the Energy Legislation and about the Energy SectorDownload “Energy Legislation in Albania”
Download “Albanian Energy Today”
Tourism in Albania
A few words over the Adriatic coast:
It stretches from the delta of Buna River to Vlora city. The most suitable sandy beaches for holidays are: Velipoja, Shëngjini, Kune, Bay of Lalzi, Durrësi, Golemi, Mali I Robit, Spille, Divjaka, Darëzeza, , New beach of in Vlora…Tiny sand, pure sea water, high-quality service and modern and traditional cuisine. Diversified bogs and very rich in bio-diversity: marshes, backwaters, streams, lake and lagoons. There are great opportunities for those keen in nature, eco-tourism and contemplation of numberless birds. Many protected areas.A few words over the Ionian Coast:
It starts from the “Uji i Ftohtë” (Cold water) in Vlora, and continues with small interruptions up to the cape of Stillo. The sea is deep and the waves are of big size (more than 4 meters). Beaches and bays offer greater opportunities for diving, sailing etc… In this coast, you will find several protected areas: Nature Managed Reserve of Karaburun, the National Park of Llogara and Butrint and several nature monuments. Bogs of Butrinti are included in the International convention of Ramsar. High coast forms the “Albanian Riviera” which is the warmest corner, where the subtropical cultures find appropriate conditions for their growth. Riviera presents one of the rare beauties of the Albanian nature and one of the most picturesque places of the Mediterranean with a high tourism potential, which has just started to be used.Apart from the seas, lagoons and marches, the countless water resources of Albania with lakes, rivers and their deltas present one of the most crucial natural potentials for the development of the different kinds of water tourism.
LakesAlbania is rich in a variety of small and big lakes of different origins which constitute not only important natural objects for tourism development but also a separate segment of tourism. The biggest lakes are situated in bordering areas with neighbour countries which creates the possibility for the inter-country tourist exchange.
• The lake of Shkodra, in the north of the country at the border with Montenegro: there are two touristic villages, namely Shiroka and Zogaj in the southern shores of the lake.• The lake of Ohrid in the southern part of the country at the border with Macedonia: the deepest lake in the Balkans (300 m depth). The city of Pogradec is constructed in the southern corner of the lake and is well known for its healthy and fresh climate during spring. Other tourist attractions are the village of Lin which was the ancient holiday resort for the parents of the Byzantine emperor Justinian, the village of Pojska and that of Tushemisht with its underground fountain of Drilon flowing into the lake.
• The lake of Prespa which comes further to the southeast of Ohrid: this is the highest tectonic lake in the Balkans (853 meters above see level). The Prespa zone is the largest industrial park in Albania with a surface area of 27.700 hectares. The development of rural tourism in the villages along the shores of the lake is being promoted. This zone provides good opportunities for the development of eco-tourism and agro-tourismInvestment opportunities in Mountain tourism
Albanian mountains are more than 2000 meters above the see level and provide spectacular views and excellent opportunities for adventure tourism. Due to the prevalence of exceptional hilly and mountains landscape in Albania (almost 2/3 of the country’s surface area) there are remarkable potentials for the development of a wide range of mountain tourism activities which can take place during the cold winter season (white tourism) or during the warm season (green tourism).Winter sports can be carried out in mountainous territories. Major mountain locations in Albania provide good opportunities for skiing. The best locations are Voskopoja in the district of Korca (hosting the national skiing championship), Dardha, Drenova and Boboshtica.
Development of winter sports requires investment not only in skiing infrastructure but also in the construction of accommodation structures.
On top of the coast, the lakes and the mountains there are many other tourism segments:
• Curative tourism: Albania is abundant in thermal water fountains with high curative values for the treatment of several diseases.
• Cultural tourism:
- Archaeological centres and objects, which witness the oldest traces of settlement and development of out country. Among them we can distinguish centres such as that Butrinti, Appolonia, Dyrrhahu etc. One of them, the national park of Butrinti, due to its extraordinary scientific and cultural values, is included in the List of world heritage, under UNESCO protection.
- Castles and fortresses, which belong mostly to the Middle Age. Among them, it is worthy to mention the castle of Berati, Gjirokastra, Kruja, Shkodra, Tepelenq, Fortress of Petrela, etc.
- Various historical, cultural and religious objects such as: mosques, museums, galleries, fairs, theatres, sportive centres, etc.
• Rural tourism: Recently the Albania Ministry of Tourism, Culture, Youth and Sports is involved in developing an ambitious project named “The 40-ty Doss-Houses of Albania”, which are classified as the forty most characteristic, back sighted doss-houses from the north to the south, considered as a new offering package to the Albanian tourism.
Legislation:
Law no. 9734 dated 14.05.2007 “On Tourism” regulates this sector. The key elements of this law are:
• Strong commitment to regulating tourism industry• Standardization of tourist services
• Enticement of tourists, by introducing minimum quality standards for tourism services
• Comments: business tourism yet to be better defined and targeted incentives to be offered to key industry players, and not just tourist structures run by small operators, more aggressive marketing for tourism to have a larger spectrum and not be based on the neighbouring countries.
Other relevant laws are:
• Law no. 9663 dated 18.12.2006 “On Concessions”. The purpose of this law is to create a favorable framework for promoting and facilitating the implementation of privately financed Concession Projects enhancing transparency, fairness, efficiency and long-term sustainability, in development of infrastructure and public service projects. • Law no. 7764 dated 02.11.1992 “On Foreign Investments” that creates a legal basis for the creation of favourable conditions for investors. The law, which applies to all categories of foreign investments, specifies procedures for proper promotion and protection. • Law no. 9901 dated 14.04.2008 “On Entrepreneurs and Companies”. This Law shall regulate the status of entrepreneurs, the founding and managing of companies, the rights and obligations of founders, partners, members, and shareholders, companies’ reorganization and liquidation. Companies are general partnerships, limited partnerships, limited liability companies or joint-stock companies. • Law no. 9880 dated 25.02.2008 “On Electronic Signature”. The purpose of this Law is to create the necessary legal framework on the recognition and application of electronic signatures in the Republic of Albania. Main tourism-institutions are:• Inter - Ministerial Tourism Committee
• Ministry of Culture, Tourism, Youth and Sports
• Advisory Committee of Tourism (yet to be established)
• Tourism National Agency
• Tourism Standards Commission
• Tourism Service Office (yet to be established)
• Local Government Units
Download “Albanian Tourism Today”
Infrastructure in Albania
Over this last decade, investments made in infrastructure have boosted the development of the infrastructure sector, playing an increasingly important role in fostering the economic development and intensifying the economic ties among various areas of Albania.The main priority for Albania’s government has been the construction of a road network capable of being integrated in regional networks and creating facilities not only for domestic but also for international transporters.
In the air transport sector, the Air Space Modernization Project (more than 50 Million USD) has increased the safety of air traffic control, thus significantly increasing the number of flights over our air space.Investments in sea transport have mainly been concentrated in the ports of Durrës and Vlora, which are the main entrances of Corridor VIII. The port of Durrës has the biggest share of exports, almost 75%.
Upcoming Big Investment Opportunities
On June 2008, thanks to the joint work efforts of the Ministry of Economy Trade and Energy, Ministry of Public Works, Transport and Telecommunications, Ministry of Finances and the Ministry of Environment is designed the Analysis Report on Albanian National Railways It resulted in concrete activities to be implemented by the parties involved, aiming the need to further improve the current situation of the railways in Albania. So the Albanian railways will soon be given in concession.
The following will be given in concession:
• 447 km main railway line
• 25 locomotives
• 290 railway coaches.
There is a welcoming environment in interesting approaches expected to be made by domestic and foreign investors in regards of being part to different railway segments launched for concession.
Other very interesting investment opportunities in Albania’s infrastructure sector include:
• Prospective construction by private companies for the following roads: secondary axis Central-South Albania; segments in the road Tirana - Dibra (border).• Procedures are open for the road Thumane – Peze – Rrogozhine situated in the North-South direction of Tirana and intersecting the main road connecting Tirana with the country’s biggest port of Durrës. According to a preliminary study this road would have a daily traffic of 15 thousand vehicles which would economically justify any investment.
• The segment Qafe Thane – Qafe Plloçe• The segment Papër – Kuçovë – Berat – Tepelenë
• Furthermore, identification is complete as regards to the needs for construction of bus terminals for inter-city and international lines.
• Once the re-organization of General Directorate of Roads is complete, the road maintenance section will be open for concession too.
For more information about the Albanian infrastructure and for a detailed description of the upcoming investment opportunities, you can consult the Albinvest publication about the Albanian Infrastructure as well as the publication about the infrastructure legislation.
Download “Albanian Infrastructure Today”Download “Infrastructure Legislation in Albania”
Real Estate in Albania
Albania offers investors early entry opportunities in one of Europe’s most favorable locations with huge capital growth potential and no purchase taxes. Land is now an attractive investment in Albania for property developers. Today seaside lands in virgin areas with planned infrastructure are in high demand, as well as commercial plots along the Tirana-Durres highway. Other interesting segments include those in Tirana suburbs that are attractive in terms of communications and services. Also of interest are retail properties and seaside lands for tourism development. The tourism housing market has a good growth perspective.Key reasons to invest in the real estate in Albania:
In the last few years, Albania has made clear progress in a number of areas necessary to allow the smooth running of real estate finance and real estate transactions. The lending environment is greatly improved. As a property market that is considered to be at an initial emerging market phase, Albania offers a surprising number of modern mortgage options. Many western banks are present in the market and the terms of loans are very similar to what property investors are used to from more established markets.
Some key characteristics of loans in the real estate market are:
Mining sector
For a small country, Albania has considerable extractable mineral resources including chromium, copper, nickel and coal. The quality and quantity of chromium is particularly high: prior to 1990 Albania was the world’s third-largest producer and is today the only European country with significant reserves of this vital mineral.These quantity and quality mineral reserves provide an ideal situation for foreign investors to step in and expand their business in Albanian mining sector, with future export potentials to other countries in the region.
Mining industry in Albania is currently being privatized and the government is also offering concession for construction and operation in this sector.Albania’s coal and nickel mines are privatized, while the 3 largest cooper mines are being operated through a 30 year concession contract by a Turkish company, Ber-Oner.
Actually, The Ministry of Economy Trade and Energy (METE) is accepting bids for the three largest mines and fabrics in Albania, respectively: Chrome Mine of Kalimash, Chrome mine of Vlahna, Fabric for the Enrichment of Chrome Kalimash and Fabric for the enrichment of Copper Golaj.Legislation
Law no. 7796 dated 17.02.1994 “On mining in Albania” regulates this sector.Law no. 8741 dated 15.02.2001 “On Labour safety during mining activity” is an amendment to the previous.
Law no. 9261 dated 22.07.2004 “On some changes and additions to the Law on Mining in Albania” and Law no. 9667 dated 29.12.2006 “On some changes and additions to the Law on Mining in Albania” are supplements.
Download the text of Law no. 7796
Download the text of Law no. 9261
• Law no. 9663 dated 18.12.2006 “On Concessions”. The purpose of this law is to create a favorable framework for promoting and facilitating the implementation of privately financed Concession Projects enhancing transparency, fairness, efficiency and long-term sustainability, in development of infrastructure and public service projects.
Download the text• Law no. 7764 dated 02.11.1992 “On Foreign Investments” that creates a legal basis for the creation of favourable conditions for investors. The law, which applies to all categories of foreign investments, specifies procedures for proper promotion and protection.
Download the text• Law no. 9901 dated 14.04.2008 “On Entrepreneurs and Companies”. This Law shall regulate the status of entrepreneurs, the founding and managing of companies, the rights and obligations of founders, partners, members, and shareholders, companies’ reorganization and liquidation. Companies are general partnerships, limited partnerships, limited liability companies or joint-stock companies.
Download the text• Law no. 9880 dated 25.02.2008 “On Electronic Signature”. The purpose of this Law is to create the necessary legal framework on the recognition and application of electronic signatures in the Republic of Albania.
Download the textFor a more detailed description of the Mining sector you can read the Albinvest publication about the mining sector. We also suggest you to read the Albinvest publication about the mining legislation.
Download “Albanian Mining Today”
Download “Mining Legislation in Albania”
Garments Manufacture
Textiles and garments is the largest employer in the manufacturing sector. Building upon a strong post-war tradition of garments production, since privatization in 1990 many local firms have created a strong reputation for themselves while foreign firms have substantially increased their share of the sector's output particularly within the export processing regime. Many foreign firms have been operating in Albania for more than a decade and a large percentage are still increasing the scope of their operations and hiring more staff. Export and import figures, both of which have increased in recent years, are closely related within a re-export regime that sees imports of semi-final products re-exported after several operations inside Albania.
The main advantages of investing in Albania in the garments sector are:
• An available labour force across the country with experience in the sector
• Direct and total labour costs are lower than most comparable countries
• Easy access to Italy, Greece and the Balkan markets
• No VAT or customs duties for 100% facon producers under the re-export scheme
• Widespread language skills, particularly in Italian, English and Greek
• Linkages and experience of working with Italian and Greek investors
• Workforce is adaptable and flexible, able to adopt new technologies and meet international quality standards
• Ability to produce small orders and meet short delivery times, required by customers
• Lower costs of transport due to proximity to Italy and Greece
Download a more detailed PDF about investing in the garments sector in Albania
Shoe Manufacture and Leather Processing
Albania is one of the leading shoe producers and leather processors in the world. Exports of Albanian footwear have doubled in the last three years, and in the period 2000-2004 Albania’s shoe and leather exports grew at more than double the rate of world exports in the sector. Albanian shoe and leather exports are currently growing by 20-30% per annum.
Nearly 100 shoe and leather companies in Albania produce 1.2 million pairs of shoes per month. Albania is the second largest exporter of shoes to Italy - itself by far the leading exporter of shoes in the world – and Albania is an ideal location to export to the Italian, European and Balkan markets. Foreign investors in Albania are also increasingly exporting to non-European markets. With free trade agreements signed with the Balkan countries and the EU, Albania offers unrestricted export opportunities within the region.
Albania is a particularly attractive location for companies producing and exporting:
Safety shoes for export to global markets
All types of shoe production and assembly for Balkan and European markets
Leather processing for Albanian shoe producers and for the European market
Leather accessories for the Balkan and European markets
Albania is the most competitive location in Europe for shoe and leather production. At $150-200 per month, labour costs in the shoe and leather sector in Albania are one-tenth those in Italy and one-fifth those in Greece. Wages in Albania are one-third to one-half the level of other Balkan and East European countries. The Albanian workforce is both stable and loyal. Figures show that 50% of employees in our leading shoe manufacturers have worked in the factory for more than 5 years.
Foreign manufacturers in Albania can turn around European orders quicker than any other country. Some firms are delivering orders to Italy within 24 hours of receiving them in Albania. Quality levels in Albanian shoe and leather factories are high, with many companies having ISO9001 certification. Companies are adopting advanced production techniques: today, some of the most advanced shoe factories in the world are located in Albania.
With the strong growth rate of exports, there are growing opportunities for leather processing companies to invest in Albania and service on a just in time (JIT) basis the raw materials needs of our major shoe manufacturers.
Download a more detailed PDF about investing in the Albania shoe and leather sector
Agribusiness
Albania offers opportunities in agriculture built around its favourable climate and low-cost rural labour force. Still using traditional methods, Albania's fruit, vegetable, meat and dairy products are cultivated using few artificial additives, chemicals, or pesticides. Thus Albania is in a position to become a world-class producer and exporter of quality organic foods destined for regional, European and North American markets.
The potential is considerable; our mild Mediterranean climate (with mild winters and dry summers) and abundant precipitation (an annual average of 1,400 mm in the coastal areas and 1,800-3,000 mm in the hill and mountain regions), are especially suited for growing early and late season fruits, olives, medicinal plants and wine. Large rivers provide effective irrigation especially in the coastal plains where 60% of the arable land is located.
Albania’s significant forest resources present additional opportunities for foreign investment, particularly by furniture and cabinet-making companies with their own distribution networks. Albania’s fine beech wood forests should interest firms engaged in quality furniture making.
The Albanian agribusiness sector is an important part of the Albanian economy contributing some 25% of GDP and employing 60% of national workforce. Substantial investments have been made in recent years and added value in the sector has increased at 10-15% per year. However, the total volume of production is not equal to domestic consumption needs and significant imports of food products are still necessary. Opportunities exist therefore for various import substitution strategies.
Within the sector, the food processing industry is a better than average performer. In some niche market products, such as frog meat or sage, the sector is an important player at the European level. Double digit growth has been seen in the sub-sectors of herbs and spices, vegetable oils and fish products. Again, the food processing sector is diverse, but dominated by small-scale, often artisan producers, most of them producing for the local market. While some medium-sized enterprises, often relatively modern, aim to serve regional markets, production volumes do not meet domestic requirements. Small-sized investment opportunities have been identified in many sub-sectors. The best can be found in segments where exports already exist, namely medicinal plants and herbs, early and late season vegetables, preserved products such as olives, olive oil, canned tomatoes, fresh and processed fish, and cheese.
Download a detailed PDF report on the Albanian agriculture sector
