Environmentalist groups have filed a complaint with the European Union's energy watchdog to challenge the legality of the sale of a planned $1.3 billion coal-fired power plant in Kosovo.
Five local and international environmental groups that filed the complaint on May 13 with the Vienna-based Energy Community body say the deal will strain Kosovo’s state budget and lead to higher costs for consumers.
In their legal challenge, the environmental groups argued that the deal does not comply with EU rules on state aid because it provides the London-listed power firm ContourGlobal with "a range of benefits that give it an unfair advantage over other energy producers."
The Kosovar government did not immediately comment on the complaint.
Kosovo and ContourGlobal on May 3 chose a consortium of General Electric subsidiaries to build the 500-megawatt Kosova e Re (New Kosovo) plant.
The planned $1.3 billion power plant is meant to meet nearly half of Kosovo's power demand, and the government in Pristina has committed to buying its total output over 20 years.
Construction of the plant is expected to start this year, but the contract still awaits ratification by Kosovo’s parliament.
“Whatever caused them to sign this absurd contract, it is up to Kosovo parliamentarians, the Kosovar public, and international bodies like the Energy Community and European Commission to make sure it doesn’t get ratified, for the sake of Kosovo's consumers and taxpayers," said Pippa Gallop of CEE Bankwatch Network, one of the groups that filed the complaint.
Among other things, the five environmental nongovernmental organizations said the agreement guaranteed that a state-owned company would buy all the electricity generated by ContourGlobal at a target price of 80 euros ($90) per megawatt hour, which they said is "much higher than current electricity prices in the region."
Most of Kosovo's electricity is currently produced by the Kosova A and Kosova B coal plants, which are among Europe's worst polluters.
The Kosovar government has said that Kosova e Re would burn 40 percent less coal and release 20 times less emissions than Kosova A, which the new plant will replace.