Western Balkans citizens legally resident in EU equal to 14% of region’s population
International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Alexei Navalny arrested on arrival as he returns home
LONG READ: The oligarch problem
Russia's National Welfare Fund accounts for almost 12% of GDP
Police arresting activists ahead of Saturday’s demonstration in support of Navalny
Biden seeking a five-year extension to START II missile treaty
Russian consumer confidence index drops q/q, y/y in 4Q20
Western Balkans and Ukraine urged to scrutinise coal subsidies
Oligarchs trying to derail Ukraine’s privatisation programme, warns the head of Ukraine’s State Property Fund
Private finance mobilised by development banks up 9% to $175bn in 2019
VISEGRAD BLOG: Central Europe's populists need a new strategy for Biden
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Czech MPs pass protectionist food law in violation of EU rules
M&A in Central and Eastern Europe fell 16% in value in 2020, says CMS report
Hungarian vehicle makers hit by supply chain shortage
COVID-19 and Trump’s indifference helped human rights abusers in 2020
OUTLOOK 2021 Poland
OUTLOOK 2021 Slovakia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
FDI inflows to CEE down 58% in 1H20 but rebound expected
Albania needs reforms for e-commerce to thrive, says World Bank
BALKAN BLOG: US approach to switch from quick-fix dealmaking to experience and cooperation
Corona-induced slump in global clothing sector dragged down Albania’s 2020 exports
Bosnia's exports in 2020 amounted to BAM10.5bn, trade deficit to BAM6.3bn
Bulgaria's Biodit first company to IPO on new BEAM market
Bulgaria’s government considers gradual easing of COVID-related restrictions
Sofia-based LAUNCHub Ventures holds first close of new fund on €44mn
Spring lockdown caused spike in online transactions in Croatia
ING: Growth in the Balkans: from zero to hero again?
Labour demand down 28% y/y in Croatia in 2020
EBRD investments reach record €11bn in pandemic-struck 2020
OUTLOOK 2021 Moldova
Storming parliaments: New Europe's greatest hits
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Montenegrins say state administration is most corrupt institution
North Macedonia plans to cut personal income tax in IT sector to zero in 2023
Romania government to pursue “ambitious” timetable for justice reforms
OUTLOOK 2021 Romania
OUTLOOK 2021 Slovenia
Slovenia’s opposition files no-confidence motion against Jansa cabinet
Slovenia’s government to release funds to news agency STA after EU pressure
UK Moneyhub picks Slovenia for post-Brexit European base
D’S Damat franchise deals ‘show Turkey’s hard-pressed mall operators becoming their own tenants’
Turkey’s benchmark rate held as concerns over faltering recovery come to fore
Turkish lira breaches HSBC’s stop-loss, Turkey ETF signalling outflows
CAUCASUS BLOG : What can Biden offer the Caucasus and Stans, all but forgotten about by Trump?
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
OUTLOOK 2021 Georgia
Iran’s Khamenei menaces private citizen Trump with image of aircraft shadowing blond golfer
Iran’s technology minister indicted for failing to properly implement internet censorship
No US move to rejoin Iran nuclear deal imminent, say Biden national security nominees
TEHRAN BLOG: Will Biden bet on a quick return to the Iran nuclear deal?
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
Mongolia's PM quits amid protests over treatment of mother with coronavirus and newborn baby
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
OUTLOOK 2021 Tajikistan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
Download the pdf version
In a region where coal continues to dominate the energy mix, Montenegrin Prime Minister Dusko Markovic’s announcement that plans to expand the Pljevlja coal-fired power station would be scrapped and the country would shift its focus to renewables investments was a significant step.
Montenegro, like most of the countries in the EU-aspiring region, derives a large share of its power from coal. Typically Montenegro produces around 40% of its energy from lignite; the figure is higher elsewhere.
Then on September 19, the day before a week of global strikes over climate change began, Serbia’s energy ministry announced the launch of the 104.5 MW Kovacica wind farm by Israel's Enlight Renewable Energy, the largest wind farm opened to date in the country.
This is welcome news in a region where serious questions have been raised not only over the environmental impact of a host of new power plants in a part of Europe where air pollution is already high, but also over their economic viability. Further questions surround whether EU accession candidates from the region will be able to meet emissions targets set for members of the bloc.
It seems to have been the question of economic viability that scuppered the Pljevlja power plant expansion, which had previously been among the Montenegrin government’s top priorities.
Podgorica cancelled a deal with Skoda Praha to build the new unit at the end of 2017 as the Czech company failed to find an investor after state-owned Czech Export Bank pulled out in 2016. The controversial project also precipitated Italian utility ASA’s exit as one of the two main shareholders in Montenegrin power utility EPCG alongside the Montenegrin government. A2A also had serious concerns over the viability of the project, and decided to exit EPCG before work started.
Since then the government in Podgorica has been searching for an alternative source of investment, such as potentially tapping into Chinese financing, before eventually scrapping the plants. “We have given up the valorisation of a large coal deposit in the Pljevlja area for the construction of the second thermal plant, although this is a large investment and brings a big number of jobs,” Markovic said.
He added that the government chose instead to invest in sustainable development and environment protection and is spending €50mn to upgrade areas that cause pollution. EPCG had already announced plans for an environmental upgrade of the existing Pljevlja power plant, which it said would extend Pljevlja’s life by 20 years and bring it into line with the EU’s environmental requirements. Montenegro hopes to become member of the bloc in 2025.
The project envisages construction of a desulphurisation system, denitrification system, improvement of the work of the electro filter and construction of a system for wastewater treatment. It will also invest €20mn in ecological reconstruction of the Maljevac ash and slag dump.
Among the critics of the Pljevlja expansion were the head of the Energy Community secretariat Janez Kopac, who called the project unprofitable and unnecessary in a 2018 interview with Montenegrin broadcaster RTCG.
Environmental pressure group Bankwatch has repeatedly warned that the second Pljevlja unit was among ten coal-fired power plant projects across the Western Balkans that are facing serious financial problems as they have not taken carbon costs properly into account.
“Although it's taken a while, Montenegro is the first Western Balkan government to cancel a new planned coal plant and deserves recognition for this. It should serve as an example to its neighbours Bosnia and Herzegovina, Serbia and Kosovo, who are still persisting with coal plans which are neither environmentally nor economically justified,” said Pippa Gallop of Bankwatch in comments emailed to bne IntelliNews.
Elsewhere in the Western Balkans, coal accounts for almost all of the electricity produced in Kosovo, around 70% of the total in Serbia and over half in Bosnia & Herzegovina and North Macedonia. Albania is the only exception, producing virtually all of its electricity from hydropower.
The reliance on coal — often from ageing power plants — has implications far beyond the region, as shown in a study from the environmental NGO Health and Environment Alliance (HEAL) that found 16 out-dated coal-fired plants in the six Western Balkan states are a public health and economic liability for the whole continent, with people in EU countries bearing the majority of the health impacts and costs.
The report noted that eight of the ten top polluters in terms of sulphur dioxide (SO2) emissions in Europe are located in the Western Balkans with the worst offender being Serbia’s Kostolac B with 128,000 tonnes of SO2 emissions in 2016, followed by Bosnia’s Ugljevik.
Not only that, but there are plans to build new coal fired power plants across the region, even though this will make it more difficult for Western Balkans countries to meet renewable energy generation and emissions reduction targets.
Turning away from coal
As the Montenegrin government experienced with Pljevlja, raising finance for new coal fired power plants is increasingly difficult. International development banks made d decisive move away from funding for coal power at the end of last year.
Among the major lenders to the region, in 2018, the European Bank for Reconstruction and development adopted a new energy sector strategy which, it said, “closes [the] door on financing of thermal coal mining and coal-fired electricity generation”. The bank stressed its position as the largest investor in the renewable energy industry in the region where it operates.
The World Bank has made a similar move away from coal and said in October 2018 that it will not support the planned 500 MW Kosova e Re coal power plant in Kosovo, that Pristina wants to build to replace the much older Kosova-A power plant that is one of Europe’s dirtiest and largely responsible for the poor air quality in the Kosovan capital.
Instead, countries in the region that are looking to build new coal power plants are looking to Chinese finance, and Chinese engineering companies and state banks have in many cases been happy to oblige. This has brought its own problems, however, for example in the spat between the Bosnian Federation’s authorities and EU officials over the state guarantee for the planned Tuzla power plant expansion.
Renewables investment gathers pace
There have been efforts to invest into renewables in countries across the Western Balkans, but these have been mixed, says Gallop. "What we see now in the region is that Montenegro and North Macedonia are starting to speed up with introducing renewables and gradually turning away from coal, while Bosnia and Herzegovina, Serbia and Kosovo are still concentrating on coal and seeing renewables mainly as a side-salad, so indeed there are some changes,” she told bne IntelliNews.
A couple of weeks before Markovic announced the government’s change of stance on Pljevlja, EPCG shareholders approved plans to build the company’s first wind farm in an investment estimated at €58mn. Plans to build a solar plant near Podgorica are also underway.
North Macedonia has the dubious distinction of being home to two cities with some of the worst air pollution in Europe, the capital Skopje and Tetovo, home of the Jugohrom Ferroalloys plant. This has given a strong incentive for investment into renewables. The country’s first wind farm at Bogdanci opened in 2015, and there are now plans for an expansion. Meanwhile, state-owned power company ELEM is preparing to build a 10MW solar power project.
And while, coal may still be king in other Western Balkans countries, renewables investments are still going ahead.
In Serbia, Enlight’s new Kovacica wind farm together with the Cibuk wind farm — both funded by the EBRD — are set to reduce the country’s carbon dioxide emissions by over 600,000 tonnes per year, the development bank said in April. Looking ahead, Fintel Energija, the Serbian subsidiary of Italy's Fintel Energia Group, said that it plans to start the construction of Europe's largest wind farm in Serbia in 2019.
Bosnian utility Elektroprivreda BiH (EPBiH) has made construction of the Podvelezje wind park one of its priorities along with two hydropower plants, while German renewable energy company Wpd, plans to invest €1.2bn in the construction of a wind farm across the border region between Bosnia and Croatia. The authorities in Bosnia’s smaller entity Republika Srpska have, however, been criticised for their decision to halt incentives for wind farms.
A policy rethink ahead
As the Western Balkans countries progress towards EU accession — the primary political goal for countries across the region — they are having to rethink their energy policies to bring them into line with those of the EU. This includes reducing emissions and increasing renewable energy generation. For some countries such as Albania, which generates almost all of its energy from hydropower, this is less of an issue. For others, there are some major policy changes ahead.
In particular, there is the question of subsidies for coal power. The director of the Energy Community secretariat Janez Kopac famously said earlier this year that if the countries of the Western Balkans were to join the EU tomorrow, all coal-fired power plants in the region would go immediately bankrupt. His comment was based on a new study by the Energy Community that found Bosnia, Kosovo and Serbia paid €444mn in direct subsidies to coal-fired power plants in 2015-2017, nearly three times higher than those for producers of energy from renewable sources.
here to continue reading this article
and 5 more for free or purchase
12 months full website access including
the bne Magazine for just $250/year.
Register to read the bne monthly magazine for
Password could contain only
and have 8-20 symbols length.
Please complete your registration by confirming your
A confirmation email has been sent to the email
address you provided.
can't be empty.
No user with
this email address.
Access recovery request has expired, or you are using
the wrong recovery token. Please, try again.
Access recover request has expired.
Please, try again.
To continue viewing our content you need to complete
the registration process.
Please look for an email that was sent to
with the subject line
"Confirmation bne IntelliNews access". This email will have
instructions on how to complete registration
process. Please check in your "Junk" folder in
case this communication was misdirected in your
If you have any questions please contact us at email@example.com
Sorry, but you have used all your free articles fro
this month for bne IntelliNews. Subscribe
to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free
digital weekly newspaper to subscribers to
the online package.
Click here for more subscription options,
including to the print version of our
flagship monthly magazine:
Take a trial to our premium daily news
service aimed at professional investors that
covers the 30 countries of emerging
For any other enquiries about our
products or corporate discounts please
contact us at
If you no longer wish to receive
Magazine annual print
Website & Archive
Combined package: web
access & magazine print
Take a trial to our premium daily news service
aimed at professional investors that
covers the 30 countries of emerging Europe: