Energy Sector Technical Assistance 2 Project

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The Second Energy Sector Technical Assistance Project for Kosovo aims to assist in (i) developing capacity for a commercially sustainable exchange of power with the regional system, and optimizing utilization of existing generation capacity through economic dispatch; and (ii) developing a framework for attracting private sector investment in the energy sector. There are three project components identified on the basis of the ESTAP-I Energy Sector Study (December, 2002) and discussions with the Government. Component 1 prepares a detailed feasibility report for a 400 kV transmission interconnection between Kosovo and Albania taking into account regional perspective, and developing an approach for commercially sustainable terms of exchange of power with the neighboring systems. The feasibility study will be conducted in coordination with Albania. Component 2 prepares a bankable project for establishment of a dispatch center in Kosovo. Component 3 assists in developing a policy, legal, regulatory, and institutional framework for private investment in the energy sector. The Terms of Reference for Component 3 are currently being developed. The TORS will include, inter alia, a review from the perspective of foreign private investors of issues such as applicable commercial law, business registration, currency regime and profit repatriation; access to international finance and guarantees; applicable investment protection treaties; ownership of property laws relating to securing of obligations, concessions, leases and mortgages; energy sector regulation, licensing, energy trading, regulatory institution; labor laws affecting foreign private investment; dispute resolution systems; taxation (export and import duties, value-added taxes, presumptive and profit taxes, personal income tax etc., municipal taxes, royalties); and applicable environmental regulation, etc.