Deployment of broadband networks will provide several benefits to Albania leading to economic and social development by increasing business opportunities in public and private economic sectors alike. It will also provide digital connectivity between Albania and other countries in the region and the EU and improve social inclusion of all participants and communities while having a positive impact on governance, health, education, tourism, business undertaking and overall quality of life.
The aim of this project was to identify the exact needs, options, costs, and financing structure of the construction of next generation broadband networks. The project “Feasibility Study and Cost-Benefit Analysis for Regional Broadband Infrastructure Development in Albania” has been prepared for the Ministry of Infrastructure and Energy with the objective of preparing project documentation required for the deployment of fixed broadband infrastructure in the scope of the Government’s National Broadband plan 2013-2020.
The study was implemented since 25 July 2019 by COWI-IPF Consortium (IPF8) through a €520,000 grant funded by the European Union through Western Balkans Investment Framework (WBIF). EIB is the lead International Financing Institution supporting this project.
Following the assessment of the existing situation in all 61 Local Government Units (LGU) in Albania, LGUs and their villages were classified into black, grey and white zones in terms of existing and planned infrastructure and market competition. While among 83 cities there is not one that is white, out of 2995 villages the 2862 are white.
A technoeconomic model was developed to calculate the cost to deploy and operate broadband networks in Albania, in 4 different scenarios, for which the cost estimate for rural and urban areas was also done. The preferred scenario (Gigabit Passive Optical Network -GPON- with mixed underground and aerial FTTH Network for all Albanian territory) has an estimated CAPEX of €597 million and OPEX of €329 million. The Legal, Regulatory and Organizational framework in Albania was investigated and recommendations were made for improvement of the framework for the facilitation of the deployment of broadband networks throughout Albania. The Cost-Benefit Analysis of the network deployed in Albania was performed for all 4 scenarios. The selected had the highest Economic Rate of Return (ERR=15.5%) and the highest Economic Net Present Value (ENPV=€783 million). Similar figures have been calculated for all 12 Albanian Regions for the selected scenario. Investments in Regions where ERR are below 1 should be combined with investments in Regions with high ERR to incentivise the next generation broadband network deployment all over Albania.
Different investment models were proposed for each technological scenario. An Active Layer Open business model with private Design-Build-Operate investment is recommended for 20 years, whereby public sector will be the owner of the network and private sector will be the operator. To enable that, among 4 different procurement strategies the one proposed incorporates: One beneficiary, multiple subprojects in one procurement phase. The period of implementation is foreseen as 5 years.
The closing workshop of the project took place virtually on 28 July 2020 at 10:00 during which the results of the project were presented to all interested stakeholders.