Kosovo prepares for big investments in the energy sector
Written by Ethem Çeku, Minister of Energy and Mining
Prishtinë, Oct 11, 2006 - The Government of Kosovo has identified three major directives for a fast, sustainable and socio-economic development of the country: economy, energy and education. In regards to energy, I would like to emphasize that the demand for energy in the region and in Europe is there; and, Kosovo is rich of lignite resources. Kosovo is potentially well positioned as a generator of energy. This reality has been very clearly expressed in the Strategy on Energy for Kosovo, already approved by the Assembly of Kosovo, and strongly supported by the international institutions.
The Ministry of Energy and Mining (MEM), backed up strongly by UNMIK, has worked intensively during 2006 in cooperation with the World Bank, USAID, EAR and others to prepare a major project aiming at developing the lignite mines in the field of Sibovc; the rehabilitation of power plant Kosovo A, and the construction of new generating capacities of 1000 – 2000 MW.
In order to coordinate and mark the progress of this project that will attract private investors, a Steering Committee was established, which is led by the MEM. It consists of several ministers as well as representatives of UNMIK institutions. The project costs are estimated at 3 billion euros – an investment that dwarfs all other economic activity in Kosovo.
Kosovo’s Sibovc field has geological lignite reserves of about one billion tons. This is sufficient to supply all units of existing power plants until the end of their lifetime as well as the 40 year lifetime of the new power plant envisioned with an estimated installed capacity of up to 2100 megawatts (MW). Private foreign investment is key to implementing the energy development project. The Kosovo Consolidated Budget does not have the resources to fund this project. I reiterate that the payment of spent electricity is a necessary condition for a stable situation and the creation of basic conditions for attracting private investors in the sector of energy and the sectors that depend on it.
As a first step in the realization of the project an Expressions of Interest was published in August 2006. This is the process through which the Project Steering Committee (PSC) will decide on a short list of qualified private investors.
Another very important activity is the preparation of a bidding package consisting of documents that would be offered by the PSC to private investors included in the short list; investors will submit their technical and financial offers for the realization of investments. The PSC also expects to begin negotiations with the best selected investors/consortium in 2008.
From 10 to 11 October 2006 MEM, in cooperation with other institutions in Kosovo, will host an International Conference of Private Potential Investors. A high number of very important institutions of the region are expected to participate in this event.
The conference will provide a forum for interested investors to meet with government officials, energy and mining specialists, legal experts and engineers to discuss various aspects related to private investments in the three above mentioned areas. This is especially important as the deadline for prospective bidders to react to the expression of interest for pre-qualification is October 31, 2006.
To conclude, I would like to say, once again, that investments in the energy sector would enable Kosovo to realize fast economic development, increase its economic output, and stimulate other private investment followed by increased job opportunities for its citizens.