(Reuters) - London-listed power generator ContourGlobal (GLO.L) has scrapped plans to build a coal-fired power plant in Kosovo, a decision welcomed by environmental groups, and said it would make no further coal plant investments globally.
The 500-megawatt project would have provided around half of the electricity demand of the Balkan country, which is struggling with power shortages. But ContourGlobal CEO Joseph Brandt said the plant was unlikely to ever be built unless the government decided to take it forward as a state project.
“Our involvement in that project is over,” Brandt told Reuters in an interview.
The previous government had committed to buying electricity from the new plant but Kosovo last month approved a new coalition government almost four months after a snap election following the prime minister’s resignation.
“As a result of the political situation in Kosovo ... our development project is incapable of reaching its milestones prior to the required project completion date,” ContourGlobal said in its full-year results statement.
The axing of the plans was welcomed by the CEE Bankwatch Network of environmental groups in central and eastern Europe, which was concerned the project would lock the country into decades more fossil fuel power production at a time when most countries are trying to reduce greenhouse gas emissions.
“This is a good news. Political parties in the new government have clearly said they would not back this project,” Pippa Gallop of CEE Bankwatch told Reuters.
ContourGlobal also ruled out any further coal investments.
“We will not develop or acquire coal power plants in the future and, with only one majority-controlled coal project in our 107 power plant portfolio, we are increasingly reducing our carbon emission intensity.”
The company, which operates more than 100 power plants across Europe, Latin America and Africa, reported a 15.2% rise in annual adjusted core earnings as it benefited from the sale of a 49% stake in a portfolio Spanish solar power assets.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $703 million, for year ended Dec. 31, from $610 million it reported last year.
Brandt said he did not expect the coronavirus to have a big impact on the company and said its global portfolio would help to mitigate any dips in power demand in particular locations.
Reporting by Susanna Twidale in London, additonal reporting by Maja Zuvela in Sarajavo Samantha Machado and Shanima A in Bengaluru; Editing by Patrick Graham, Jane Merriman and Pravin Char