Kosovo signs deal with US firm for billion-euro power plant

Kosovo on Wednesday signed a deal with US power generator ContourGlobal for the construction of a 500-megawatt coal-fired power plant that aims to provide energy independence for the Balkan country.

"This project will represent the largest foreign investment in Kosovo's history," said the US ambassador to Kosovo, Greg Delawie, at the signing ceremony.

Kosovo's government said ContourGlobal would provide 30 percent of the total cost of building the "Kosova e Re" (New Kosovo) plant, worth about 1.3 billion euros ($1.5 billion). The US firm will also be "responsible for arranging debt financing".

The plant will replace the decades-old Kosovo A plant and cover nearly half of Kosovo's electricity demand, with the aim of reducing Kosovo's dependency on "unpredictable energy prices in the regional market", according to the government statement.

Delawie noted that Kosovo's current power plants were "old and less reliable than we all want". He said energy security had been a "huge obstacle" to economic growth in one of the poorest parts of Europe.

Studies have shown that Kosovo's unreliable electricity supplycauses economic losses of 300 million euros each year, the US embassy said.

The Kosova e Re project, due for completion in 2023, "will be in line with World Bank studies showing coal to be the most affordable option for Kosovo", the embassy statement added.

But local environmental groups have long opposed plans for the new plant on pollution concerns.

The government statement said that ownership of the unit will pass into its hands after 20 years of operations "at no extra cost".

Kosovo unilaterally declared independence from Serbia in 2008, a move that Belgrade does not recognise.

© 2017 AFP