Today, the Plug show will investigate another scandal involving the Rama government. Although this affair has received little attention, the financial damage amounts to hundreds of millions of euros. We will discuss two power barges in Vlora, Tigri 1 and Tigri 3, which have been stationed on the Vlora coast for two years without producing a single kilowatt of energy, yet they will cost at least 121 million euros. The origins of this affair, like many others, began with the declaration of a national emergency, followed by equally urgent corrupt practices.

On October 9, 2021, Prime Minister Edi Rama made a statement warning citizens and spreading panic about an impending energy crisis that never materialized, not in Albania, nor in any other country in the region, because there was no crisis. Even more absurdly, talk of a crisis began just before winter, a season when Albania's hydroelectric plants, which generate the majority of the country's electricity, operate at full capacity.

As with every other crisis declared by this government, panic seems to have served another purpose. While citizens and public opinion were debating the possibility of blackouts, the government was busy allocating millions for abusive projects. These projects will be the focus of today's investigation by the Plug show.

Just like the incinerator scandal, everything began with the declaration of a state of emergency.

With Decision No. 584, dated 08.10.2021, the Council of Ministers declared an emergency in the supply of electricity:

ON DECLARING A STATE OF EMERGENCY IN THE SUPPLY OF ELECTRICITY

Pursuant to Article 100 of the Constitution and letter "ç" of point 1, Article 90 of Law No. 43/2015, "On the Electricity Sector," as amended, upon the proposal of the Deputy Prime Minister and the Minister of Infrastructure and Energy, the Council of Ministers DECIDED:

1. The declaration of a state of emergency in the supply of electricity.

5. The state of emergency in the supply of electricity shall remain in effect until April 15, 2022.

6. The Deputy Prime Minister, the Minister of Infrastructure and Energy, the Minister of Finance and Economy, KESH sh.a., OST sh.a., and OSHEE Group sh.a. are tasked with implementing this decision.

The rapid actions taken for one of the biggest scandals that has harmed the country and drained public finances raise suspicions that everything was premeditated. Just two months after declaring the emergency, Prime Minister Edi Rama approved another decision that paved the way for leasing the power barges Tiger 1 and Tiger 3, two generators that had been decommissioned by their owning company for years and had become a financial burden. On December 9, 2021, Special Decision No. 757 was signed to acquire these two floating power plants, located thousands of kilometers away.

On Amendments and Additions to Decision No. 620, Dated 22.10.2021, of the Council of Ministers, "On the Approval of Conditions for Imposing the Public Service Obligation on Licensed Entities in the Electricity Sector During the State of Emergency in Electricity Supply and for Addressing and Preventing It"

DECIDED:

For the purpose of supplying all necessary quantities for the needs of the Universal Service Supplier, the electricity production company assigned with the public service obligation has the right to lease thermal energy generation assets, trade/deposit, or conduct energy purchase and sale transactions in the free market.

In the same decision, the government authorized KESH to lease these assets for up to three years. This three-year period is not justified, given that the state of emergency was only declared until April 2022. Simply put, while the emergency was planned for six months, Tiger 1 and Tiger 3 were to be leased for up to three years under this decision.

As soon as Edi Rama gave the order, work began immediately. Based on Decision No. 757, which came into effect on December 13, KESH published a "Call for Expressions of Interest" on January 5, 2022. According to Bulletin No. 8, dated January 24, 2022, of the Public Procurement Agency (page 348 and onwards in both Albanian and English versions), the deadline for submitting offers was set for January 27, 2022. However, in the English version published on KESH's official website, the deadline for submitting expressions of interest was listed as January 14, 2022. Later, KESH issued a clarification in English, stating that the submission deadline had been extended to January 21, citing the failure to submit the request to the PPA in the required format. In summary, the deadline for submitting offers was initially January 14, extended to January 21, and finally set for January 27.

Clearly, there is a discrepancy in all announcements published by KESH regarding the "Expression of Interest" and "Leasing of a Thermal Generation Asset." In all cases, the deadlines set by Law 162/2020 "On Public Procurement" and procedures for values exceeding the high monetary threshold for procurement were not respected. Even more detailed data, raising further suspicions about the tender process, can be found in an official U.S. publication by the Securities and Exchange Commission (SEC) under Form S-1 of the Securities Act of 1993.

On page 117 of the Table of Contents, Business section, Excelerate Energy, Inc. states that it was notified by the Albanian government in January 2022 that its offer for the thermal generation asset was declared the winning bid. Additionally, on page 6 of the same document, there are interesting details that highlight the questionable nature of this tender process:

"In Albania, we signed a memorandum of understanding in March 2021 with ExxonMobil and the Ministry of Infrastructure and Energy to conduct a feasibility study for the development of a liquefied gas energy project. In the same line, we responded to the Albanian government's request to lease generators due to the declared emergency. In January 2022, we were notified that our offer had been selected as the winning bid."

Based on the above, there is suspicion that not only were the legal deadlines for public procurement not respected and the winner was announced in violation of these deadlines, but it also appears that this competition was predetermined. As explained below, based on information obtained during Minister Balluku's public interview, it can be inferred that DCM No. 757, dated December 21, 2021, was clientelistic and aimed at favoring the winning company of this tender with a minimum financial impact of approximately $65 million.

In the technical specifications, it was required that the bidding company submit proof of ownership of the Thermal Generating Asset as a fundamental condition for the next procedural steps.

On page 352 of Bulletin No. 8, dated January 24, 2022, of the Public Procurement Agency, it is specified that the applying operator must submit:

"A declaration and documents from the entity that owns or has in use a thermal generating asset, which it can provide for use by KESH sh.a. through a lease agreement."

PLUG conducted a thorough investigation to determine whether the declared winning company had possession of Tiger 1 and 3 when it submitted its bid.

The official report of the Bangladeshi company Khulna Power Company LTD, including its 2018-2019 and 2021-2022 annual reports, confirms that the Thermal Generating Asset Tiger 1 & 3 had been for sale since 2018 and was sold to Excelerate Global Operations LLC in April 2022 for $15 million, after receiving authorization from Bangladeshi authorities to export this "Thermal Generating Ship."

An article published in the media 'The Business Standard' provides crucial information for this investigation:

Khulna Power Company, since 1997, had ownership and use of these power-generating ships under an agreement with the Bangladeshi government. Based on this agreement, Khulna Power Company LTD was exempt from local taxes on these assets, as long as they were either operational or being exported. Otherwise, the company would have been required to pay local taxes related to the total investment made around 1997, amounting to approximately $96 million.

To clarify: In 1997, an agreement was signed with the Bangladeshi government for these two ships, with an investment of $96 million. Since then, the company had been exempt from import and local taxes worth tens of millions of dollars, and at the end of the contract, in order to continue benefiting from the tax exemption, the company had to re-export the asset. 

The article, dated April 24, 2022, explains that Khulna Power Company agreed to sell the ships to Excelerate Global Operations LLC for €15 million.

The article and Khulna Power Company's media statement clarify that these ships had not been in operation since 2018 and that this was the first offer received for them in four years.

This raises suspicions that Excelerate Global Operations LLC did not possess the asset not only during the bidding period but also at the time of signing the contract with KESH on April 4, 2022.

It is a fact that Excelerate Energy Bangladesh LTD - Khulna Branch and Summit Group, the ultimate owner of KPCL-1, operate from an FSRU (LNG Terminal) in the same area, and heavy fuel oil (HFO) thermal generating assets have been phased out and replaced with natural gas-powered assets.

According to KESH, the request for these additional generating assets in the Albanian system arose from KESH's need to (i) fulfill the public service obligation imposed by DCM No. 757/2021 as well as address the emergency situation caused by disruptions in electricity supply and the international energy markets.