Report calls on the World Bank not to invest in Kosovo power plant

8 February 2016

A January report by the US-based Institute for Energy Economics and Financial Analysis has cast further doubts on the viability and efficiency of the proposed lignite coal power plant in Kosovo, which the World Bank is considering supporting (see Observer Autumn 2014, Update 86). According to the report, the plant was estimated to cost €1 billion ($1.1bn), but costs have been revised to €4.2 billion ($4.55 billion). The electricity costs per household are also expected to increase to 12.9 per cent of annual income, twice the European average. The report calls on the Bank to implement energy-efficiency measures and install renewable energy in Kosovo, arguing that this “would be less expensive than building a coal plant and would stimulate economic development”. Visar Azemi of the Kosovo Civil Society Consortium for Sustainable Development (KOSID) commented that the coal power project “will strain the household budgets of Kosovars in every income group, turning electricity into a luxury for many … It embodies a serious threat to the economic and fiscal health of the nation.”

In June 2015 a complaint concerning the resettlement and land right issues related to several Bank-supported operations, including the proposed Kosovo power project, was submitted by residents of Hade and Obiliq municipalities and Kosovo-based civil society organisations to the Bank’s accountability mechanism, the Inspection Panel. According to the complaint: “As a result of the Bank’s improper technical assistance, parts of our community have been forcefully displaced by a resettlement action plan that is not compliant with international standards and Bank policies.” The Bank’s board approved the investigation in September, which is now ongoing, with a final report expected after April 2016.