BGF/KOSID on TC "Kosova e Re": "Eight agreements, three major impacts!"

Prishtina, April 25, 2018 - Within Balkan Green Foundation, the Kosovo Civil Society Consortium for Sustainable Development (KOSID) organized a press conference presenting the findings from the analysis of agreements signed by the Kosovo Government with ContourGlobal for the construction of the New Kosovo Power Plant. During the conference, an analysis was presented on the social, financial and environmental impact that this project will have on the country and its citizens - whereby it results that a contract creates a twenty-year financial stagnation for the country, isolates it from the integration and liberalization of the electricity market and extinguishes the hopes for an energy system based on clean environmentally-friendly energy sources and a healthy population.

Burim Ejupi, from KOSID, said that after analyzing these eight contracts, it is clearly disclosed this is the most harmful contract for Kosovo in all its modern history, therefore, this project should be rejected and stopped. "If this contract is implemented, Kosovo will undertake unmanageable and undeserved costs. The state budget will be aggravated and many vital projects for Kosovo will not be possible because of the focus on covering billions of investment costs. The economic logic behind this project disables us to call ContourGlobal an investor. Rather, they are a contractor who will implement a contract with no single risk to their capital. Such contracts bring Kosovo in the wake of economic collapse, the termination and cancellation of this contract are necessary to pave the way for real social dialogue on the future of the energy system of the Republic of Kosovo," said Ejupi.

On the other hand, Dardan Abazi, Researcher at KOSID, clarified that the construction of TPP "Kosova e Re" represents catastrophic environmental, health and social costs that outweigh the economic benefits. Abazi said that "The contract for the construction of a new power plant sublimates an old state-subsidy policy for a particular company, puts an operator in an exclusive position in the market, and kills the consumer's interest in affordable energy. The construction of a new coal-fired power plant did not take into account Kosovo's needs for market integration with regional and European markets. Above all, the new power plant "Kosova e Re" and the terms of this contract put the private operator in a completely independent and attractive market position, which consequently makes TC "Kosova e Re" completely dominant to other energy producers who are not provided with any of the guarantees that ContourGlobal enjoys with this agreement. Ultimately, such a contract is the most damaging deal Kosovo has signed since the war".

Whereas, Linda Shuku, a researcher from KOSID, disclosed financial details that the realization of this project would interweave itself. "While we can argue that Kosovo does not need a new coal-fired power plant, with this agreement, Kosovo will rush to buy coal-fired power from a private operator for the next twenty years. With a financing facility where 70 percent of the cost is expected to be covered through credit and 30 percent through private investment, as well as applying a return rate of 7.5 percent, the total cost of construction of TPP "Kosova e Re" will reach 3 billion euros in value. Moreover, the contract also provides for additional compensation provided to ContourGlobal, which will increase the total cost of construction even more - a cost that is obviously high for the country's economy. In addition to the extraordinary preparatory costs up to the implementation of the project, such a project will trigger an increase in electricity prices," Shuku said.

At the closing of the roundtable, it was clearly stressed that the construction of the new coal power plant is being arranged without an environmental impact assessment and without an analysis of the social and economic impact. According to KOSID, the contract for the construction of the new power plant "Kosova e Re" is harmful because the financial aspect is overwhelming, unpredictable in terms of environmental and social aspects and insulating and short-sighted in terms of European integration!

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