October 10, 2018 / 4:03 PM / 2 months ago

World Bank pulls out of Kosovo coal power plant project

PRISTINA, Oct 10 (Reuters) - The World Bank said on Wednesday it would not support a planned 500-megawatt (MW) coal-fired power plant in Kosovo, the first major energy project in the Balkan country in more than two decades.

Kosovo’s government had asked the Washington-based lender to provide it partial risk guarantees that would help unlock cheaper loans for the project.

Asked by a Kosavar civil society representative during the World Bank and the International Monetary Fund (IMF) meetings in Bali if the bank would still back the project, its President Jim Yong Kim said the lender has made “a very firm decision” not to go forward with it.

“Because we are required with our bylaws to go with the lowest cost option and renewables have now come below the cost of coal...so without question we are not going to do that,” he said during the meeting, broadcast live on the World Bank’s website.

It is unclear how the government will now proceed with the project which environmentalists say could lock Kosovo into a future powered by lignite – the dirtiest form of coal.

Government officials were not immediately available for comment.

Kosovo signed a deal in 2017 with London-listed power generator ContourGlobal to build the plant at a cost of around 1 billion euros ($1.15 billion).

With around 14 billion tonnes of proven lignite reserves, the fifth largest in the world, the country is struggling with power shortages and the new plant was designed to help it meet around half of the country’s power demand.

Nearly all electricity in Kosovo is produced in two ailing coal-fired plants, seen as some of the worst polluters in Europe.

$1 = 0.8679 euros Reporting by Maja Zuvela and Fatos Bytyci; editing by Emelia Sithole-Matarise

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