Albania, Italy and the United Arab Emirates (UAE) signed an agreement on January 15 on a project valued at around €1bn to build a subsea interconnection to facilitate the transfer of renewable energy across the Adriatic Sea.

Energy generated in Albania will be transferred to Italy via an underwater cable crossing the Adriatic Sea. The agreement adds to existing connections between Italy and the Balkans, including a 430-kilometer subsea power link from Montenegro to Italy.

The deal, signed at the World Future Energy Summit in Abu Dhabi, will leverage the UAE’s expertise in solar and wind energy to bolster Albania’s renewable energy capacity.

“The investment agreement for the underwater connection of the energy distribution network with Italy, as well as for investments in increasing production from renewable sources in Albania, was signed today,” said the Albanian government in a statement. 

The deal was signed by officials from the three countries in the presence of Italian Prime Minister Giorgia Meloni, UAE President Sheikh Mohamed bin Zayed and Albania’s Prime Minister Edi Rama.

Rama  estimated the project’s value at approximately €1bn and projected it would become operational within three years. 

“This agreement will serve to increase Albania’s capacity as a key player in the region, based on its production of 100% renewable energy,” Rama said, according to a government statement. 

The underwater cable will link the Albanian port of Vlore with Italy’s Puglia region, the narrowest point between the two countries. 

"It has been a long and challenging road to reach today as Albania becomes an internationally trusted partner, with leading countries in the electricity sector, thanks to the hard work and maximum commitment of the entire team," wrote Albania's Energy and Infrastructure Minister Belinda Balluku on Facebook.

Meloni highlighted the strategic importance of the agreement in addressing Italy’s long-term electricity needs. “This three-way arrangement demonstrates how international cooperation can support sustainable energy goals while meeting growing energy demands,” Meloni said, pointing to its alignment with global climate commitments.

The relationship between Albania and Italy has strengthened recently. Under a deal between the two countries, migrants aiming to enter Italy will be housed in Albania while their applications are assessed. However, the project, championed by Meloni, hit a hurdle when Italian courts refused to validate the detention of the first two groups of asylum seekers. 

UAE Industry and Technology Minister Sultan al-Jaber described the agreement as a “far-sighted collaboration” that connects Albania’s renewable energy potential, the UAE’s expertise and Italy’s sophisticated energy market. Al-Jaber, who also chaired the COP28 climate summit, said the initiative aligns with global goals to triple renewable energy capacity and transition away from fossil fuels.

The UAE, a major oil producer aiming to achieve carbon neutrality by 2050, has been investing heavily in renewable energy. 

“By leveraging Albania’s abundant natural resources, the UAE’s renewable energy expertise, and Italy’s energy infrastructure, we are fostering a sustainable energy future across the Mediterranean,” Al-Jaber said. 

Albania has significantly increased its renewable energy capacity, adding approximately 500 megawatts in the last two years. The country plans to diversify beyond hydropower, which currently dominates its energy production. 

“Albania now generates 10% of its energy from solar sources, compared to virtually zero a few years ago,” Rama noted, adding that projects in the pipeline aim to raise this to 30%.

The initiative also strengthens Albania’s ambitions to become a net electricity exporter by 2030. Rama said recently that Albania’s renewable energy share of final energy demand, at 44%, places it among Europe’s leaders alongside Scandinavian nations.

In 2019, Italian energy firm Terna inaugurated a similar cable connecting Montenegro and Italy, following an investment of €1.1bn.