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Republic of Albania
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| | Introduction | Background
| Oil | Natural
Gas | | Foreign Investments | Who's Who | Links | Bibliography | |
Albania officially joined the INOGATE Programme on 19 September 1999 under the signature of the Vice Minister of Public Economy and Privatization Mr. Victor Doda.
Albania is the first country having ratified the INOGATE Umbrella Agreement on 14 February 2000.
Geography and Topology:
Albania is located in the Southeastern Europe, bordering the Adriatic Sea
and Ionian Sea, between Greece and Serbia and Montenegro.
Total area: 28,748 sq km; border countries: Greece 282 km, The Former Yugoslav Republic of Macedonia 151 km, Serbia and Montenegro 287 km.
Capital: Tirana
Population: 3,544,841 (July 2002 est.) of which Albanian 95%, Greek 3%, other 2% (Vlach, Gypsy, Serb, and Bulgarian) (1989 est.).
Economy: Albania is noted for a booming growth, encouraged by a fast growth of agricultural production, which throughout the period has given more than 50% of the GDP.
After a three year declining period during years 1990-1992 (a decline that in real terms is calculated to be almost at 40% as compared with 1989 GDP figure) GDP sharply increased during the consecutive years 1993-1996 (in real terms around 9%). The main contribution of this increase, around 60% was dedicated to agriculture, which was widely privatized and enjoyed an increase in productivity. Although in a smaller percentage, a good part of this increase during this period is dedicated to construction and services. After 1995, the growth model changed, the growth in agriculture noted lower levels, while other sectors, like construction, services and transport, enjoyed higher growth rates.
The energy plays an important role in the development of the economy of a country. In the last 10 years Albania faced the free market economy, which has required a progressive growing need for energy.
Despite the difficulties and hardships, Albania has made considerable progress in achieving macroeconomic stability and financial sustainability, as well as in moving towards a market-based economy.
Basic economic indicators:
| Domestic Economy | |||
| 2000 | 2001 | 2002* | |
| GDP (USD bln.) | 3.75 | 4.11 | 4.54 |
| GDP Growth Rate (%) | 7.0 | 6.5 | 6.0 |
| GDP per capita (USD) | 1,134 | 1,327.8 | 1,400 |
| Inflation (%) | 0.1 | 3.1 | N/A |
| Unemployment (%) | 16.0 | 14.4 | 13.7 |
Sources: Country Commercial Guide 2003; Transition Report 2002, European Bank for Reconstruction and Development
| Foreign Investment | |
| Top Investors from Countries (cumulative 1992-2002 USD mln) | |
| Italy | 71.5 |
| Greece | 28.6 |
| Turkey | N/A |
| Foreign Investment by Sector 2001 (USD mln.) | |
| Tourism | 48.6 |
| Light Industry | 28.6 |
| Agrarian and Food Processing Industry | 25.7 |
| Building raw materials production | 21.5 |
The Balkans region has total proven oil reserves of approximately 335 million barrels, with 165 million barrels of that located in Albania. Although a number of companies are active in the region and exploration is picking up, especially in offshore areas in the Adriatic Sea, oil production in the Balkans remains low: the entire region produced a total of 53,300 bbl/d in 2001, Albania, in particular, 7,000 bbl/d.
Oil Transit:
Albania-Macedonia-Bulgaria Pipeline
Perhaps the most important oil pipeline project in development in the Balkans
region is a proposed 750,000-barrel-per-day (bbl/d) pipeline connecting
the Bulgarian Black Sea port of Burgas with the Albanian Adriatic port of
Vlore. The Albanian-Macedonian-Bulgarian Oil (AMBO) Pipeline Corporation
has been established with exclusive rights to construct the pipeline, which
is estimated to cost between $850 million and $1.1 billion.
The AMBO pipeline, which would run via Macedonia, would allow oil that is being shipped across the Black Sea to be piped across the Balkan peninsula to the Adriatic Sea, thereby reducing tanker traffic through the congested Bosporus Straits and the Aegean Sea.
| Name-Location | Albanian Macedonian Bulgarian Oil (AMBO) Pipeline |
| Route | Burgas (Bulgaria) via Macedonia to Vlore (Albania) on Adriatic coast |
| Crude Capacity | 750,000 bbl/d (could be expanded to 1-million bbl/d) |
| Length | 560 miles |
| Estimated Cost-Investment | $850 million to $1.1 billion |
| Status | Construction delayed, (proposed 2001-2002) as financing is arranged. Completion originally targeted for 2004-2005 |
The AMBO pipeline proposal has received letters of acceptance from the governments of Albania, Bulgaria, and Macedonia, and a $980,000 feasibility study, partially funded by the U.S. Trade and Development Agency, concluded that the 560-mile pipeline project was feasible. AMBO began to assemble financing for the project in June 2001, with construction originally scheduled to start in 2001 and completion by 2005. However, luring foreign investment to the troubled region has been difficult, and ethnic violence that erupted in Macedonia in February 2001 near the proposed route further hindered efforts to fund the pipeline's construction. Once the financing is in place, construction is expected to take three years.
Total natural gas reserves in the Balkans region are just over 3 trillion cubic feet (Tcf). Yugoslavia, with 1.7 Tcf in proven natural gas reserves, holds nearly 60% of the region's total, while Croatia contains a further 1.2 Tcf and Albania has just 100 billion cubic feet (Bcf). In 2000, Croatia produced 58.6 Bcf of natural gas, while Yugoslavia's natural gas output stood at 19.2 Bcf. Albania, the only other natural-gas producing country in the region, produced just 0.7 Bcf to fulfill its domestic demand.
| Energy Supply Indicators, Albania | |
| Proven Crude Oil Reserves, 1/1/02E (Million Barrels) | 165 |
| Natural Gas Reserves, 1/1/02E (Billion Cubic Feet) | 100 |
| Petroleum Production, 2001E (Thousand Barrels Per Day) | 7 |
| Natural Gas Production, 2000E (Billion Cubic Feet) | 0.7 |
| Crude Oil Refining Capacity, 1/1/02E (Thousand Barrels Per Day) | 26 |
The most important law, which in reality provides a number of basic guarantees and protections for foreign investors is Law No. 7764, dated November 2, 1994 "On Foreign Investments".
According to this Law, all foreigners, either physical or legal persons, who intend to invest in Albania have no need to ask for permission or authorization, they shall not be expropriated or nationalized or be subject to any other equivalent measure. The foreign investor enjoys the right to transfer all funds in currency and in kind related to his investment out of the Republic of Albania.
To provide security and protection against lost arising from political risks (thereby providing confidence to potential exporters and investors in Albania), the International development Association (the World Bank) has approved a credit of USD 10 million to the Albanian Government under its Private Sector Recovery Project to support a Political Risks Guarantee Facility, to be administered by the Albanian Guarantee Agency (AGA), a statutory corporation owned by the Government of Albania.
Special protection is guaranteed to foreign investments in Albania and to foreign investors from the states with which the Republic of Albania has signed agreements the concerning avoidance of double taxation and mutual guarantee of investments.
Members of the Government:
| President | Alfred Moisiu |
| Prime Minister | Fatos Nano |
| Dep. Prime Min. | Ilir Meta |
| Min. of Energy and Industry | Viktor Doda |
| Min. of Foreign Affairs | Ilir Meta |
| Min. of Economy | Arben Malaj |
Main State Institutions:
Albanian Presidency - www.president.al
Albanian Parliament - www.parlament.al
Ministry for Foreign Affairs - www.mfa.gov.al/shqip/default.asp
Institute of Statistics - www.instat.gov.al
Albanian Economic Development Agency - aeda.gov.al
Ministry of Public Order - www.mpo.gov.al/anglisht/mrp-ENGLISH.htm
Chamber of Commerce and Industry of Albania - www.cci.gov.al
International Organisations:
The World Bank in Albania - www.worldbank.org
EBRD - www.ebrd.org
US Agency for International development - www.usaid.gov
Albanian Media Sources:
Albanian Daily News - www.albaniannews.com
Balkan Web - www.balkanweb.com
| Central and Eastern Europe Business Information Centre | (www.mac.doc.gov/ceebic) |
| Foreign Investors Association of Albania | (www.fiaalbania.org) |
| CIA World Fact Book 2002 | |
| The World Bank Group | |
| US Energy Information Administration | |
| Southern Eastern Europe Online |
The European Union provides technical assistance to the INOGATE Programme. 