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Compelled by a local court order, Czech utility CEZ announced on November 17 that it had hooked Albania's water utilities back up to the grid after cutting them off due to high debts. The company says it will now launch an arbitration suit. Meanwhile, the Albanian regulator is reported to have started the process of withdrawing the company's licence.

Following an order from a Tirana court, CEZ is now reconnecting other state-owned organisations in Albania to the grid. The company complied with the court's order to prevent its losses from growing, but might consider an arbitration suit, CEZ spokeswoman Barbora Pulpanova told CTK.

"We have complied with the order issued by the court so as to prevent further fines and a growth in financial loss, but we do not agree with it. That is the reason why our lawyers are working on an appeal. All the steps we took were legal and we consider such intervention into operation of a private company as unjustified," Pulpanova said.

The situation appears to be approaching the end-game in a long-running dispute between CEZ and Tirana since the Czech energy giant took over the country's power distribution monopoly in 2009. The company complains that low tariffs, high unpaid bills, electricity theft and erratic taxation are making it impossible to trade profitably. Tirana says the poor performance is due to CEZ's mismangement.

With relations approaching a nadir, late last week CEZ decided to disconnect Albania's water utilities from power supplies after a series of unsuccessful talks with the Albanian side over debts that have left subsidiary CEZ Shperndarje owed around €38m. The step resulted in the closure of petrol stations and reduction of drinking water supplies to households and companies. The Albanian police then forced CEZ employees in various locations to renew the power supply and took six CEZ workers into custody, later releasing four.

Meanwhile, the Albanian regulator is reported to have begun the process of revoking CEZ Shpendarje's distribution licence. While admitting that it might cost as much as CZK2bn in asset depreciation, CEZ Chief Executive Daniel Benes said earlier in November that an exit from Albania is the most likely solution.

Analyst's at Erste suggest it is the obvious - and healthiest - course for the company. "Losing the licence is one of the ways that CEZ can get rid of the troubled subsidiary in Albania," they write. "Note that departure from Albania would be positive for CEZ's P&L (the assets are already written down) and more or less neutral for its cash flows."