World Bank dumps Kosovo plant, ending support for coal worldwide

The Kosova e Re lignite plant could not compete with renewables on price, said bank president Jim Yong Kim

The proposed plant would replace Kosovo A power station (pictured), which is 48 years old and frequently breaks down (Photo: Karl Mathiesen)

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The World Bank has abandoned the last coal project on its books, with its president publicly dumping the Kosova e Re plant on Wednesday.

Speaking at a town hall event in Bali, Jim Yong Kim was asked by civil society representatives from Kosovo whether the bank was still considering guaranteeing loans to the plant.

“On the Balkans, yes, we have made a very firm decision not to go forward with the coal power plant,” he said.

Climate Home News reported in June that World Bank officials had met minister of economic development Valdrin Lluka, amid rumours that a bank review had rejected the project on the grounds that there were cheaper options to solve Kosovo’s energy crisis.

On Wednesday, Kim said: “We are required by our by-laws to go with the lowest cost option and renewables have now come below the cost of coal. So without question, we are not going to [support the plant].”

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In 2015, the Kosovo government announced that it had signed an agreement with the World Bank and US company ContourGlobal to build the new station.

It is unclear what the withdrawal of the bank’s guarantee means for the financing of the project, which has long been a centrepiece infrastructure project for the Kosovo government.

In a statement last month, Kosovo prime minister Ramush Haradinaj said construction was likely to begin early next year. Lluka and ContourGlobal did not immediately return requests for comment.

Dajana Berisha, founding member of the Kosovo Civil Society Consortium for Sustainable Development (Kosid) said: “We’re happy that our efforts, work has been proven to be right. But now another battle will probably begin, because we don’t know whether the government will continue searching for other investors to come and support the project.”

In 2013 World Bank revised its lending policies to rule out new coal projects, except in “exceptional circumstances”. Kosova e Re has been the only coal project for which the bank has been considering support.

Years of war and slow reconstruction have left Kosovo with a power sector based entirely on the tiny country’s abundant lignite resource. Two Tito-era power stations, just outside the capital Prishtina, are notorious for breakdowns, black outs and air pollution.

In September, Joseph Brandt, founder and CEO of ContourGlobal, announced several bids for contracts to build and operate the plant. He said it was “crucial to the future of Kosovo’s energy supply”.

The World Bank’s involvement in the coal sector in Kosovo has been controversial. In 2016, CHN reported on leaked internal documents that found the bank had breached its own rules when villagers were forced from their homes to make way for a coal mine expansion.

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