Albania to fund power imports, bills distributor CEZ

* Albania to fund power imports by state-run KESH

* CEZ will be billed for its quota of imports

* CEZ did not import its September "losses" quota

TIRANA, Oct 3 (Reuters) - Albania's government said it will fund electricity imports by state-run power generation monopoly KESH for the rest of 2012, to avoid power cuts to consumers, and expects the distributor, a local unit of Czech company CEZ , to pay a share.

The government said after its Wednesday meeting that it had allowed the imports "to guarantee the uninterrupted supply for consumers and cover the losses in the distribution system".

Supply is at risk in hydro-power dependent Albania after CEZ Shperndarje, which has been in a dispute with the government over prices it can charge to final consumers, did not import electricity in September. This caused KESH to use up almost all of its water reserves to make up for the shortfall.

CEZ Shperndarje, the distribution monopoly, on Tuesday hired independent British lawyers to mediate with Albania.

A CEZ Shperndarje spokesperson told Reuters on Wednesday that the company was aware of the Albanian government decision but could not comment immediately.

The Ministry of Finance was empowered to secure an estimated $50 million dollars to fund imports of power by KESH and to pay outstanding bills for KESH's previous power imports.

"The financial costs of the electrical power imports covering losses in the distribution system will be billed to the 'CEZ Shperndarje' Sh.a.," the government said on its website.

CEZ Shperndarje is bound by law to use imports to make up for any power losses from technical faults or theft from its grid, which supplies 1.1 million homes in Albania.

CEZ Shperndarje has not been able to cut down high losses as Albania had hoped when it sold 76 percent of its troubled distributor for 102 million euros ($131.60 million) in 2008.

Losses in the grid amounted to 30 percent or even 50 percent in August of the total amount of power.

CEZ Shperndarje faces difficulties making all its consumers pay for power. It cuts power to non-paying customers, only to face attacks against its offices and sub-stations. Police protecting them has been a common sight in the last months.

In May, CEZ said it may face losses of up to 10.15 billion crowns ($523 million) over the next three years because of a regulatory decision on electricity tariffs in Albania.

The losses include 6.5 billion crowns worth of uncollectible receivables from customers that, under the privatisation deal, should be reflected in regulatory decisions on tariffs. ($1 = 0.7751 euros)

(Reporting by Benet Koleka, additional reporting by Jan Lopatka in Prague; Editing by Anthony Barker)

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