Lukashenko says he may quit as president
Belarus hits EU with tit-for-tat sanctions
Belarusian police introduce colour-coded torture system for detained protesters
Kremlin publicly condemns Belarusian police brutality in hint of growing frustration with Lukashenko
Russian services PMI rises to 48.2, but remains underwater as recovery continues to slow
Russia to start mass vaccinations on December 7
Azerbaijan’s Aliyev calls on Armenia, Russia, Turkey and Iran to assist in creating Nakhchivan land corridor
FPRI BMB Russia: Sberbank releases a three-year transformation strategy to e-commerce concern
Ukraine’s banking sector continues recovery, but profits still lagging last year
Ukraine’s real wages up over 10% in October but have been stagnant in dollar terms for almost a year
FPRI BMB Ukraine: Public has confused opinions on resolving the Donbas conflict
Western Balkans plus Ukraine subsidised coal with over €900mn in 2018-2019
Estonian parcel robot firm Cleveron eyes €30mn state loan
Estonia’s chief auditor says €1bn in state COVID-19 loans issued haphazardly
Economic sentiment in CEE falls in November as recovery momentum splutters
Estonian animation studio Imepilt to hold IPO
Brighter days ahead: The economic bounce back in 2021
Central, Southeast Europe stock markets jump in anticipation of COVID-free future
VISEGRAD BLOG: An easing of trade tensions but still an uncertain situation for export-oriented Central Europe
Hungary's PM risks isolation as Poland mulls dropping EU budget veto
Poland ready to back down from veto of EU budget
Hungary's ruling party in damage control mode after MEP sex scandal bombshell
Poland’s PMI remains stuck just above the improvement line at 50.8 in November
Czech companies dominate this year’s Deloitte Technology Fast 50 CE
Coronacrisis to get worse before it gets better forecasts wiiw
EU diplomats say no chance of Bulgaria removing veto for Skopje to start EU accession talks
IMF says downside risks to Albanian economy are increasing
EU ministers fail to agree on launch of accession talks with Albania and North Macedonia
Western Balkans commit to green agenda and regional common market at Sofia summit
Bosnia’s opposition ousts nationalist parties in major cities
Bosnia’s main ethnic parties fight to hold onto power in local elections
Southeast Europe’s EU members to get biggest boost from next budget and recovery funds
Bulgaria imposes 3-week lockdown to slow down COVID-19 spread
CEE politicians highlight trade and security ties as they congratulate Biden
Breakaway Transnistria fully under Sheriff’s control as Obnovlenie party sweeps board in parliament election
Moldova’s presidential election is over, now the battle for the parliament begins
Moldova’s foreign policy reset
Russian establishment quick to congratulate Moldova's new president-elect
Rising COVID-19 cases put intense pressure on CEE healthcare systems
MEPs urge European Commission to act against Hungarian media financing in North Macedonia and Slovenia
North Macedonia mulls decriminalising cannabis to boost tourism
Retail surpass pre-crisis peak as Romanians shop instead of holiday
Romania’s stability election
Romanian venture capital firm Catalyst launches new €40mn-50mn fund for TMT
The state is back in business
Slovenian PM Jansa stands alongside Hungary and Poland in EU rule of law row
BEYOND THE BOSPORUS: Turkish number crunchers deliver November inflation surprise of 14%
Erdogan needs to go says analyst assessing Turkey’s economic collapse
Ukraine strikes deal with Turkey to produce killer drones instrumental in Karabakh conflict
In Karabakh deal, as many questions as answers
Protesters flood Yerevan demanding Armenia’s “traitor” PM quit over Nagorno-Karabakh surrender
Who emerge as the real winners from the bloody Nagorno-Karabakh conflict?
Below average 2020 wine production destined for volatile and uncertain global market
Iran calls on Saudis to limit $67bn defence spending to Tehran’s $10bn
Iranian prosecutors pledge to pursue Trump for Soleimani killing even after he leaves White House
No reaction from Kazakh elites as bombshell FT report says Nazarbayev’s son in law siphoned millions from pipeline scheme
UK court freezes $5bn in assets connected to fugitive Kazakh banker Ablyazov
Attack of the Debt Tsunami: global debt soars to a new all-time high
Kyrgyzstan's proposed new constitution provokes widespread revulsion
Kyrgyzstan's China debt: Between crowdfunding and austerity
CFC joins RWC in assessing KAZ Minerals buyout offer as under-valuation
China business briefing: Not happy with Kyrgyzstan
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
Mongolia in lockdown after suffering first local coronavirus transmissions
Mongolia’s wrestling culture: From the grasslands to the cage
No surprises in Tajikistan as Rahmon retains presidency with 91% of vote
A Tajikistan poised on verge of economic calamity set for vote
Tajikistan revives on-off dispute with Iran
Turkmenistan: The dammed united
Turkmenistan: Everybody yurts, sometimes
Dirty money investigation reviews identified payments worth $1.4bn linked to Turkmenistan
Uzbekistan unveils extensive privatisation programme
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 have been expired. Please,
Access recover request have been 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: