Kosovo Abandons 2,000 MW Thermal Plant Project - Reuters

"The main reason for such a decision is the impact of the global financial crisis as well as environmental concerns," Reuters quoted Energy Minister Justina Shiroka-Pula as telling a news conference on Tuesday.

Shiroka-Pula also said the new tender to build a 1,000 megawatt thermal plant will be launched in early 2010. The new plant will have two units of 500 MW each.

The government launched a tender for the 3.5 billion euro ($5.21 billion) power plant in 2006, aiming to turn the Balkan country from an importer into regional power exporter. Two tie-ins - Czech power firm Cez and U.S. AES; and Italy's ENEL and Greek company Public Power Corp's Sencap - were left in the race, but had asked the government to improve the offer conditions, Reuters said.

"The two consortiums will remain in the race and we will invite other investors that are interested in this project," Shiroka-Pula said, adding that foreign groups will have to express their interest in the deal by next month.

"By mid-February the tender will be offered to consortiums," Shiroka-Pula was quoted as saying. "We are still negotiating on the percentage of shares that the government will have but this will be determined in the tender."

Kosovo is plagued by power shortages. The country's two existing older coal-fired plants, Kosovo A and Kosovo B, are in poor condition and cannot produce the roughly 1,000 MW that Kosovo needs. The Kosovo A plant falls short of existing environmental standards and will be closed by 2015, Reuters said.