New Kosovo thermal power plant, will the price of electricity increase?

Economic Development Minister Valdrin Luka today has published the commercial contract signed by the Government of Kosovo and investor “Contour Global” for T project New Kosovo, worth 1.3 billion euros.

Minister Luka has said he has managed to complete the contract this week with a thousand pages and is public to all concerned electronically.

The goal was, just as I promised to be transparent for the work we did, there is no change of contract from what we agreed on and signed before New Year's. So, I will continue to promote transparency and I believe that any agreement that is signed personally by me will be public from now on and at no moment of privacy, not preventing access to media, civil society and citizens in general”, Minister Luka has said.

He has said the project, which is a 1.3 billion-euro contract, will be in credit form, and the interest of this loan plays a very important role in the final cost of energy generation.

Luka said that they are trying to secure a priority interest or find a loan financed by states, such as that. Whether from Japan via Jaika or some state export agency, which has soft interest rates or maybe even no interest at all.

He has taken an example of Croatia, which, according to him, has financed a Termocentral that was built from “Mitsbish”, where Jajka has extended a loan of 0.7 per cent interest.

However, he said that for the cost of generation, he said they would not allow it to go above 9 per cent, because there is even the possibility of leaving the government out of this contract.

"The return to the execution is 18.5 percent, so we have managed to subtract it from 23 to 27 as it was originally, to 21 to 18.5. The cost of returning the loan normally is in a model, is estimated to be about 8.5 to 9 percent because of the most expensive negative side count. But 9 percent, I believe, is the culmination of a loan that can be obtained for such a project. Therefore, we believe that whatever is below 9 percent will positively influence the cost of generation, but in the worst extreme situations there is always a price ceiling, which cannot go to the cost of generation over it and if it goes on to that price we are free to get out of this contract before investment starts”, Minister Luka said.

According to him, it is difficult to establish how much energy prices will increase with the New Kosovo thermal power plant, but according to Luqa it also depends on KED investments in the order to eliminate losses.

“Costo that would raise the bill (for citizens) is difficult to analyse right now, normally becoming financial models to see what cost it will be, but I believe that if we from today to the realisation of the project, KEDS increases investments in the network and reduces all possible losses, with the new thermal power plant there will be absolutely no increase in the price of”, Minister Luka said.

This Termocentral according to Luka is aimed at providing enough energy, and it is normal to have a higher cost, but said the goal is to make the construction cost lower.