UPDATE 1-Verbund to build 160 mln euro Albania hydro plant

                                
  (adds details, changes dateline)
 * Verbund Albania hydro plant to start in 40 months
 * Sees power demand in Balkans outperforming rest of Europe
                                
 By Benet Koleka
                                
 TIRANA, Sept 30 (Reuters) - Austria's Verbund <VERB.VI> on
Tuesday signed a deal to build a 160 million euro ($229.6
million) hydropower plant on northern Albania's Drin River, the
fourth plant on the river but the first there for 30 years.
                                
 "We plan to be in operation in 40 months," Christian Kern, a
member of Verbund's managing board told Reuters after signing 
with Albania's Energy Minister Genc Ruli. 
                                
 "For us it is important to be here because we have a strong
presence in Central Europe, Italy and Turkey. Therefore it made
sense to expand in the Balkans. If you look at the fundamentals,
there will be a significant demand here that will outperform the
rest of Europe," Kern added.
                                
 He said Verbund, Austria's leading power producer, plans to
invest over four billion euros in Turkey in hydropower and
gas-fired plants. Verbund has bought a power distribution
company near Ankara that had three million clients, Kern added.
                                
 To win the Albanian concession for the Ashta hydropower
plant in July Verbund beat a rival bid from a joint venture
linking Compagnie Nationale du Rhone (CNR) and Electrabel, both
controlled by French utility company Suez <LYOE.PA>.
                                
 Verbund said it will build the hydropower plant at Ashta,
which would have a capacity of 48 MW and an annual production
capacity of 230 GWH, in a joint venture with Austria's EVN
<EVNV.VI>.
                                
 EVN withdraw from a tender on Monday to buy 76 percent of
Albania's power distributor. The Czech power utility CEZ
<CEZsp.PR> won the deal on Monday with a 102 million euro bid.
                                
 EVN is also negotiating an approximately one billion euro
project to build hydropower plants on the Devoll River in
Abania's east.
                                
 "I hope EVN will also make the necessary concessions in the
project of the Devoll River (to conclude the deal)," Prime
Minister Sali Berisha told the audience of businessmen and
reporters attending the signing of the deal.
                                
 Berisha saw Verbund's Ashta hydropwer plant as the
continuation of the hydropower plants on the Drin River that
were built by the communist regime -- the "Light of the Party"
at Fierze, a second at Koman and a third named after China's
communist leader "Mao Tse Tung" at Vau i Dejes.
                                
 He also added the initial plan was to build a hydropower
plant at Bushat, but it was moved to Ashta for environmental
reasons.
                                
 Albanians have been plagued for decades by lengthy and
frequent power cuts caused by drought, the dilapidation of the
communist-era grid and a failure to build new hydro and thermal
plants.
                                
 The government hopes to improve the power supply by selling
the power distributor to CEZ, building new sources of power like
Verbund's Ashta plant as well as thermal plants and by
connecting its network to Montenegro and Italy.
                                
 (Reporting by Benet Koleka, editing by William Hardy)
 (benet.koleka@thomsonreuters.com, +355 42 229824/8)
 ($1=.6969 Euro)