Will the EBRD do the right thing for Kosovo, its newest member?

10 February 2013, New Europe

As Kosovo becomes a member of International Financial Institutions, such as the World Bank and the European Bank for Reconstruction and Development, alarm bells are ringing about which model of development these bodies are pushing in the EU’s newest country.

On December 17th, Europe’s youngest and poorest nation, Kosovo, became the 66th member of the European Bank for Reconstruction and Development (EBRD), the institution created two decades ago to promote democracy and market economies in Central and Eastern Europe. In Kosovo, this membership raises hopes for economic development and improved wellbeing.

As Kosovo rejoiced at the news that another important International Financial Institution recognized our nation, the more jaded amongst us feared a repeat of the disappointment that followed after we joined the World Bank Group in 2009.

At the time, we had similarly hoped that the World Bank would bring dramatic improvements to our country. Instead, one of the main focuses of the Bank’s work in Kosovo has been to advocate for the construction of a third, dirty coal-fired 600 MW power plant outside of our capital city Prishtina, despite the fact that Kosovo is already Europe’s most polluted country.

But this is not the kind of development most of us want to see in our country. NGOs from Kosovo called on the World Bank to abandon the plan before it locked our country into another 40 years of coal dependency. While relying on coal may have appeared reasonable some decades ago, we no longer can jump on such a solution at a time when energy efficiency and renewables present a better and more affordable alternative and when the threat of disastrous climate change looms upon us so heavily.

A new coal plant would not only create emissions and stifle energy alternatives. Importantly, it would harm our agricultural sector (the main economic driver in Kosovo), worsen water supply problems when we already suffer daily cuts, and make living conditions even more unbearable. According to the World Bank’s own data, pollution from the two existing coal plants costs Kosovo over EUR 220m annually, leads to 836 premature deaths, and causes 22,900 cases of respiratory diseases amongst young children, as well as hundreds of other respiratory diseases amongst adults. What, then, makes the World Bank think we need yet another coal plant?

Instead of helping improve our lives, the World Bank aligned itself with politicians who want solutions that generate easy money for themselves so they can stay in power. The Bank trampled on its own stated objective to decrease poverty around the world by agreeing to engage in a project that will lead to more poverty and more miserable conditions.

Yet, despite the challenges we face, Kosovars remain some of the world’s most optimistic people. We still hope today that the EBRD will help make things better, even while the World Bank is failing us.

The first steps in the EBRD’s engagement with Kosovo do not necessarily look rosy: during a January meeting with our Prime Minister, Hashim Thaci, representatives of the EBRD expressed an interest in financially supporting the new coal plant that the World Bank too promotes. And this despite being aware that Kosovars opposed the World Bank’s support for this project. This is not the way the EBRD should be acting.

The first step the EBRD should take in our country is not to rush into a dirty project but, on the contrary, to reject the new coal plant death trap and instead support investments in renewable energy, energy efficiency, and modernising our non-functioning grid. Kosovo currently loses 37% of the electricity we produce and import — which amounts to more than the annual generation of our oldest power plant — due to grid failures and a non-functioning justice system which could otherwise help put things in order.

Today, our electricity bills keep rising as we are forced to pay for power that will never reach us and for investments that will lead to more deaths and more kids getting sick. Meanwhile, there is a clear path that would lead us to clean, affordable and sufficient energy – a path that would also produce more jobs, preserve our water resources, and keep our fertile soil protected from pollution and destruction.

EBRD can tap into this opportunity and help make Kosovo an example of modern, clean energy – something we are obligated to do if we want to become part of the European Union.