World Bank considers financing of Kosovan coal-fired power plant

The World Bank is continuing to mull a decision over whether to finance a coal-fired power plant in Kosovo, a facility the Kosovan government says is essential to the country’s energy security.
Jim Yong Kim
Last week the Kosovan government expressed confidence that the finance will be forthcoming and World Bank (led by Jim Yong Kim right) confirmed to Power Engineering International that financing the project is still a possibility, as part of an overall investment strategy, which also aims at bolstering Kosovo’s green credentials.

A spokesperson told Power Engineering International, “Currently, the proposed Kosovo Power Project is the only coal-based power project for which World Bank financing is under consideration.”

“At present, the World Bank is supporting a $31m Kosovo Energy Efficiency and Renewable Energy Project, aimed at reducing energy consumption in public buildings and demonstrating the economic viability of energy efficiency investments.  This project will contribute to reducing energy demand and increasing power generation from renewable energy.”

A decision to approve investment by the bank would have to meet all relevant environmental, social, and technical analyses along with public consultations while the World Bank’s Board and its shareholders will also provide due consideration to the project.

The World Bank Group provides financial support for new coal power generation projects only in rare circumstances and when no other cost-effective source of energy exists. The conditions for supporting coal power were outlined in 2013 in the World Bank Group’s Energy Sector Directions Paper which was endorsed by the World Bank Board of Directors. 

No lending for “greenfield” coal-fired power plants has occurred since 2010 while financing for renewable energy projects has grown. World Bank Group energy financing amounted to $49bn from 2010 through 2015, of which over $21bn was for energy efficiency and renewable energy projects and programs.

“I don’t think any of our partners wants to put at risk the future of our country,” Kosovo’s minister for economic development, Blerand Stavileci, said last week in reference to the World Bank’s board meeting later this year, which would finally confirm the financing.

Kosovo’s current electricity system is 97 per cent reliant on two ageing coal-fired power plants that are 46 and 35 years old.

The country has the fifth biggest lignite reserves on the planet yet outages are common due to its poor power infrastructure. According to the minister, irregular supply causes private sector losses of $332m every year.



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