An Example of How Things Should Not Be Done

August 7, 2014

Jan-Peter Olters, Country Manager for Kosovo Reporter Reisen (www.reporterreisen.com/apropos-kosovo)

Reporter Reisen: Mr. Olters, is it correct to say that the project of a new coal-fired power plant in Kosovo has become the most controversial one within the World Bank?

Jan-Peter Olters: It is at least one that everyone knows. It is one of the most controversial.

RR: The World Bank has announced to reduce investments in new coal-fired power plants. Why does Kosovo need a new coal power station?

Olters: The issue is not a new, additional power station but the ability to decommission “Kosovo A” as quickly as possible and replace it with a modern power plant. “Kosovo A” is an ancient, fragile, and very inefficient power plant, which—even with the new filters—causes significant pollution.

RR: Would it not be more sustainable to rely on alternatives to reduce the country’s dependency on coal energy?

Olters: We did ask ourselves: are there options to close “Kosovo A” without replacing it with another coal-fired power plant, while ensuring that, at the same time, energy security is assured (which is currently not the case), households and firms can pay the tariffs, and the impacts on the environment and citizens’ living conditions are minimized? We would have loved to answer this question affirmatively. In the World Bank, there are no friends of coal technology.

RR: And?

Olters: In our options study, we found unfortunately that there are no viable alternatives in the current situation. It is not possible to close the gap without replacing “Kosovo A” (the oldest and dirtiest of the two power plants that generate 97 percent of domestic electricity) with a modern power station—one that is in conformity with all European Union environmental standards and thus could be built inside the EU as well. Is this perfect? Definitely not, but of all the bad and catastrophic alternatives, this is one that remains comparatively acceptable. We are not really happy with it. It is a compromise.

RR: In a 2012 Berkeley University study, Daniel Kammen, the World Bank’s former “czar of renewable energies”, claims the opposite. By investing more in energy efficiency and renewable sources of energy, one would also create additional employment.

Olters: It is undisputed that the World Bank is no great proponent of coal energy, but it is also correct that Kosovo is an exception. Even though it is not a large country, it has the world’s fifth-largest lignite reserves. It is estimated that at least 10.9 billion tons are exploitable, which means that, with current consumption, there is enough coal for the next 1,500 years. At the same time, the preconditions for generating electricity from wind and hydro sources are unfavorable.

RR: Does this mean that the World Bank will support the project of a new coal-fired power plant with a “Partial Risk Guarantee” of US$58 million?

Olters: This decision rests with the Board of Executive Directors. If the tender process is successful and the results of the “Environmental and Social Impact Assessment” positive, we will present the project to our Board.

RR: When will the Board make a decision on this?

Olters: That could happen in mid-2015. However, the new power plant is only one puzzle piece. The issue is not whether to support coal or renewable energy, one has to look at both options together. In this, energy efficiency is a central topic. Almost one-half of the energy is consumed to heat apartments and offices. In June this year, the Board approved a US$31-million project supporting energy efficiency and renewable energy. Another World Bank-financed project has helped to stop, after fifty years, the practice of open ash dumps. A pipeline system has been installed that mixes ash with water and pumps the slurry into an old mine.

RR: In a new study, the President of the “International Network on Displacement and Resettlement”, Ted Downing, said that the resettlement preparation is inconsistent with international practice. How will you ensure that special forces and police will not again, as was the case in 2004 and 2005, carry people out of their houses?

Olters: At that point, the World Bank was not involved. Everyone—the government, the opposition, civil society—understands that, under any circumstances, this must not happen again. It was an example of how things should not be done. Looking forward, we will not support anything that we cannot monitor.

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