Corruption Hinders Balkans Energy Sector Progress

30 June 2014, Balkan Insight

Rampant corruption has raised costs, wasted opportunities for sustainable energy and distorted the market, says a new report by a group for environmental NGOs.

The report published by SEE Change Net on Wednesday says that tens of millions of euro have been lost by south-eastern European countries due to high-level corruption in the energy sector.

Marko Prelec, executive director of the Balkans Policy Research Group and lead author of the report, entitled Winners and Losers: Who Benefits from High Level Corruption in the South East Europe Energy Sector, said graft and weak institutions pose serious obstacles to a sustainable energy future for the region.

“The region needs secure sources of power and its people need that power to be clean,” Prelec said.

“The states of SEE need to implement these projects in a clean, transparent way, and if they do, the energy sector can be key to ‘de-Balkanising’ the region,” he added.

The report sums up a number high-profile corruption cases that have affected the energy sectors in Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro and Serbia, illustrating how corruption affects the sustainability of these countries’ energy systems.

The report includes the case of former Croatian Prime Minister Ivo Sanader who was convicted for receiving a ten million euro bribe from Hungarian company MOL, to the acquittal Albania’s parliamentary speaker Ilir Meta of corruption charges over an alleged bribe for the construction of a hydropower plant.

“The EU needs to pay special attention to the goings-on in the energy sector including privatizations and tendering for new projects, as well as oversee governments plans for investments which often fail to reflect the needs for a sustainable energy future,” said Garret Tankosić-Kelly of SEE Change Net.

According to SEE Change Net, those challenging corruption in the energy sector in the region, whether they be journalists, NGO activists, state prosecutors or whistleblowers from within the system, often face a hostile environment and are vulnerable to official pressure or intimidation that is intended to silence them.

The report notes that member states of the EU-sponsored Energy Community Treaty have planned about 28.8 billion euro of investments in the energy sectors of south-eastern European countries from 2012 to 2020, and managing these investments will pose a serious challenge for their governments.