Energy Community opens dispute settlement procedure against Kosovo

“Certain measures, such as energy and availability payments over 20 years under the power purchase agreement, the sale and transfer of the plant site under market value, a state guarantee, a value-added tax (VAT) exemption, and taking over several charges and costs constitute state aid,” the Energy Community secretariat said in a statement earlier this week.

The measures have not been notified to the competent state aid authority and therefore constitute per se illegal state aid, it added.

“By sending the opening letter, the secretariat initiated a preliminary procedure, the purpose of which is to give Kosovo the opportunity to react to the allegation of non-compliance with Energy Community law within two months and to enable the secretariat to establish the full background of the case,” it noted.

In December 2017 Kosovo's government signed an agreement with London-listed power generation company ContourGlobal to start the construction of 500 MW Kosova e Re coal-fired power plant, which will replace the 40-year-old Kosovo A plant. In May,  ContourGlobal and Kosovo's government said U.S.-based General Electric has been selected as the preferred bidder for the construction and long-term maintenance of Kosova e Re, which is expected to cost around 1.3 billion euro ($1.4 billion).

The key objective of the Energy Community is to extend the EU internal energy market rules and principles to countries in Southeast Europe, the Black Sea region and beyond on the basis of a legally binding framework.

($ = 0.90127 euro)