What does Kosovo benefit from the MCC programme?

Representatives of Kosovo and MCC are expected to sign the agreement on the Kompack Programme, worth a total of $236.7m, which focuses on energy projects this week. The signing will take place at a ceremony organised at the American Congress, where President Vjosa Osmani, Prime Minister Albin Kurti and Economy Minister Artane Rizvanolli will take part in Kosovo.

The Kompack programme consists of two projects and is seen as the largest investment of the American Government in Kosovo.

The MCC learns that with this programme to reduce poverty in Kosovo through economic growth, as it is estimated that poor energy supply hinders economic growth.

The five-year-old grant envisions $202m direct means from the US government, while the rest of the investments will be covered by the Government of Kosovo.

According to MCC Director for Kosovo Sarah Olmstead, the first procurement for the Kompact Programme projects is expected to begin in two years.

After signing the Kompact Programme, Kosovo's Assembly must ratify this international agreement with two-thirds of the vote.

But what concrete benefits will Kosovo have from this programme?

Power reserves through batteries

The most important project is expected to be that of Energy Conservation. Through this project, Kosovo will have power reserves through high capacity batteries of 170 megawatts. These batteries will enable the supply of about 347 megawatts per hour.

This means that the current produced at certain times can be accumulated so that it can be exploited in the hours of the day when energy demand but prices are higher.

Through batteries it is learned to reduce the need for energy import until import prices have already increased.

Also, at the Kompact Programme level, close to 1.8 million people are expected to benefit from the MCC investment. This assessment is based on the Energy Conservation Project, which teaches to cover all households connected to the electrical network, officially reportedly are 100 percent of Kosovo's households.

During the winter season, when demand for electricity increases, consumers spend up to 1,300 megawatts a day, meanwhile, the capacity to produce two thermal power plants in Obilic, Kosovo A and B totals 800 megawatts. The rest of the energy demand is covered by import.

The Energy Regulatory Office in Kosovo has said that in 2021, the country has imported 1.311.461 megavat power.

According to the MCC, the Energy Conservation Project aims to support energy security, but also for Kosovo to switch to clean energy.

Kosovo Economy Minister Artane Rizvanolli has declared 5 July that Kosovo will save at least 15m euros annually from the new MCC Kompact Programme.

According to MCC estimates, the internal rate of the return of this project is expected to be 8.7 per cent.

The domestic return rate shows the economic benefits of a project compared to its cost.

Also, from this project, the MCC estimates there may be other benefits, such as savings for potential additional services, regulation of power pressure, but also cleaner air.

Women's empowerment project in energy sector

Under the Kompact is also the <x) Transition Law Acceleration Project, which has two primary objectives: released graduates, who can be employed in the energy sector or similar sectors, and increase the number of women employed in the energy sector, who participate in the General Activity of the Workers' Power in Energy Sector.

This is expected to facilitate the energy transition led by the Government of Kosovo, creating the possibility for women who acquire the required skills to provide technical assistance to energy employers and thus increase their representation in this sector.

According to the MCC, in Kosovo women's employment rate is 14.1 percent, which is one of the lowest percentages in the region and the world. Meanwhile, business women make up only ten percent, compared with 33 percent of the level of female businesspeople in the world and the region.

Development Catalan Project

Under the Kompact Programme, the American Constitutional Institute for Development Project will be included (AFDC). This project is designed to enable the use of funds from the US Financial Development Corporation (DFC) to support private investments in Kosovo's energy sector, but also the MCC's goals in the energy sector.

MCC funds will be used to lift the risk of DFC investments in the private sector, while the DFC will be responsible for monitoring investments.

In co-ordination between the MCC, The DFC and the Government of Kosovo, through this project, are also designed to identify other possible investments in Kosovo.

Kosovo, which was affected last year by the energy crisis involving Europe, produces over 90 percent of the electricity from coal mines and lignite extraction. The rest of the electricity is produced from renewable sources, such as hydro power plants, windmills, and solar panels.