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Q: Background on Kosovo ( No Answer,   0 Comments )
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Subject: Background on Kosovo
Category: Reference, Education and News > General Reference
Asked by: ponderer-ga
List Price: $20.00
Posted: 10 Sep 2004 05:33 PDT
Expires: 11 Sep 2004 03:23 PDT
Question ID: 399297
* Background *
I'm completing a pre-employment hypothetical exercise, for which I may seek help.

My brief is to suppose the Government of Kosovo wanted to improve it's
electricity network by getting PRIVATE FOREIGN INVESTORS involved. 
IE. Get them to invest in some new generation plants (or perhaps
transmission capacity).

In order to attract foreign investors, the Government of Kosovo might
need to changes it's laws, regulations, policies, and institutional
structure.  The Government wants a consultant to undertake a major
research project and advise it of what sort of changes it could makes
and how to attract foreign investors.  It is considering hiring my
firm to provide this advice.  My manager is about to write a proposal
to the Government to do this work, but before he gets started he wants
me to write a short background of 2 or 3 pages about Kosovo, to
provide some context.  He doesn?t want to be bombarded with detail,
just given an overview of key issues to bear in mind.

* Question *
I don?t expect this 2-3 page background note to be written for me, or
even to be provided with all the information I need.  I will do my own
searching also.  What I want is someone who can have a hunt around on
the web and find a few bits of relevant information on various issues
of interest about Kosovo that I can use in my note, as well as places
to find information and things to read.

In Appendix A shown below I already have a bit of information about
electricity specifically, so I especially need more general
information about Kosovo.  Particularly if anything has happened
recently.

Possible examples of helpful information might be (I don?t expect all
of this ? these are just examples)
* Security: What is with the ?conflict?, who is fighting over what? 
how long has this been going on and is it likely to stop anytime soon?
 Is the fighting in particular places?  (Nobody wants to invest in a
generation plant that gets blown up giving no return!)
* Geography: what is the land area and population of Kosovo?  Is it a
bunch of islands (if so how many?) or landlocked?  Who are its
neighbours?
* Politics: what is the government structure?  Is it a democracy? 
When is the next election?  Is the place reasonably politically
stable?  (No-one wants to invest in a generation plant if a new
Government steals it from them after a year for no compensation)
* Economics: I?m guessing it?s a relatively poor nation.  What is the
GDP, how much does the average person / family living there earn?  How
fast has the economy (GDP) or incomes been growing over the last year
or ten?
* Anything else that seems interesting/relevant

I?m hoping for an answer within 24-36 hours.  I will check for
clarification requests every 8 hours or so, but if you think you can
make a shot at this ? go for it.  I only have the weekend to complete
this exercise, so I need a hand now.  I?ve asked a few questions on GA
before and (so far) given only 4 or 5 stars.  I have also given tips
in the past, and I may well end up giving one here ? though I don?t
promise one.

* APPENDIX A *
[I?ve been told that the Government of Kosovo has provided my firm
with this information as background already but it was written about
18 months ago]
Kosovo?s energy sector has suffered from conflict damage, loss of
mobile equipment, obsolescence of most power generation units, and
lack of maintenance and poor management dating back to before the
conflict of 1998-99. Poor performance of its thermal generation
plants, a major accident caused by a landslide at Bardh coal mine in
November 2002, and a lightning-induced fire at its main power
generation plant, Kosovo B in July 2002, are manifestations of years
of neglect in maintenance. Today, the energy sector has the following
characteristics:

·	Generation assets are old and almost entirely lignite based;
·	Poor capacity utilization, leading to shortages;
·	Adverse changes in the consumer mix over the last 10 years, away
from high value, high volume industrial to subsidized, low voltage
household consumers;
·	The network is in poor condition, with 30% of the distribution
network estimated to have been affected by conflict damage.

In accordance with a program for reconstruction and recovery in Kosovo
agreed at a Donors' Conference in Brussels on November 17, 1999, a
technical assistance project was financed by the World Bank to help
develop a strategy for the energy sector until 2015. The strategy
identified major strategic directions and investment needs, and also
stressed the need for a policy framework to promote private investment
in the sector?s infrastructure.

There are a number of reasons for promoting private investment in the
sector. First, Kosovo has one of the most favorable and very large
(10,000 million tons) lignite deposits in Europe, and there is a
strong desire to exploit this major natural resource for economic
development. The initial macro-economic analysis demonstrates clear
advantages of generating power for domestic use and export from
indigenous lignite, as opposed to the natural gas-based power
generation, which would first require infrastructure development,
because Kosovo is presently not connected to the regional gas supply
networks. Second, vast amounts of investments are needed, amongst
other things, for:

i)	Improving the utilization of Kosovo?s existing generation plants by
establishing a modern dispatch center,
ii)	Repairing distribution lines and substations damaged in the conflict, and
iii)	Extending the transmission network to optimize regional interconnection.

Kosovo does not have the financial resources to develop coal mines and
power plants at present nor in the foreseeable future, and therefore
has to try to attract private capital. The most plausible
opportunities are in inviting private investment in export-oriented
private power generation projects.

However, the policy and legal framework for private investment,
particularly in large infrastructure projects, is either unclear or
absent. This creates risks and concerns for potential investors, and
is likely to remain an impediment to meaningful PSP in the energy
sector.
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