Prishtina, October 5, 2009

Dear organizers of this international forum,
Dear attendees from abroad,
Dear guests,

I would initially like to express my gratitude for the organizers of this important forum for Kosovo.

My presentation aims to provide you, and particularly the investors and
construction companies, with an overview on the opportunities for
investment and construction and technical works in the Kosovo energy
sector in the years to come.

Taking this aim into consideration, as you can see in the slide “Table
of Contents”, the presentation provides brief information on:
I.    General information on Kosovo,
II.    Policies and strategies for the energy sector development
III.    Ways of funding the development of this sector
IV.    New Kosovo Project
V.    KEK jsc. unbundling
VI.    Privatization of KEK Distribution
VII.    Energy Efficiency and renewable sources
VIII.    Natural gas, and
IX.    Regional and European integration.

Slide 1
Contains significant general information on Kosovo, including location, demographics, GDP, economy, trading exchanges, etc.

Slide 2
Our aim for the energy sector is to increase the security of power
supply and to enhance the quality of such supply. For this reason we
have developed sectorial policies that aim to carry out reforms,
including recruitment of legal and regulatory staff required and
unbundling of our power utility, in line with the applicable laws and
obligations deriving from the Energy Community Treaty. This way we will
be able to attract private investments in our energy infrastructure,
through open, transparent and competitive bidding processes. Our
policies are drafted with a view to develop domestic energy markets and
their integration in regional and European markets. 

Our energy strategy, recently finalized, seeks to build new lignite
fired generation capacities which, through modern technologies with not
exceed allowed environmental pollution benchmarks. This strategy also
envisages the construction of the new generation capacities from hydro
and other renewable sources; and to enhance and expand power
transmission and distribution systems.

Slide 3
Government Policy for funding the energy sector needs is clear; it will
be made possible mainly by the private sector. The road we are trying
to follow is to improve the financial performance of KEK by increasing
the billing and improving the collection rates to a satisfactory level.
In the meanwhile, until we reach financial closure of the New Kosovo
Project and KEK Distribution privatization, the Government will
continue to provide support for KEK through funding for capital
projects such as (i) opening ofhte New Sibovc Mine, (ii) repairs and
maintenance in TPP Kosovo A and B, and (iii) power imports, as
required. Implementation of these projects, funded or co-funded by the
Government, will be achieved through bidding procedures, namely private
contracts, where you could take part as well.  

With private investments we will also achieve the rehabilitation of TPP
Kosovo B. For this purpose, we will soon begin with the developed
required studies, which will propose to the Government as to the form
of private sector participation. I believe that PPP would be most
suitable, though, this decision lies with the Government to be made
after the completion of the aforementioned studies.

With regard to district heating and energy efficiency improvement, we
have received plenty valuable promises from international donors. These
projects shall also be carried out through private contracts, thus, you
could also express you interests as soon as they are launched.   

Slide 4
New Kosovo Project transaction closure is envisaged by end 2010. This
means that a number of contractors and sub-contractors can be hired for
the realization of this large project.

For this project, our Government will request the full implementation
of the European approach, and this applies not only to the energy,
environmental and competition aspects, but also for social issues and
the displacement of residents of the planned new Sibovc mining field.
The Government shall also build the Kosovo part of the 400kV
transmission line with Albania. This project will also be realized
through private contracts.

Slide 5
Full KEK unbundling is going as planned. Is carried out in line with the EU approach and Kosovo applicable laws.
Thus, a new power distribution and supply corporation shall enter into
operation by 2010. Only Generation (and lignite mining) will remain
with KEK.

Slide 6
This slide shows that KEK Distribution privatization shall be carried
out with a strategic investor with the financial support to carry out
the large required investments in the power distribution network, in
order to achieve a uninterrupted and quality supply for the consumers.
All these investments of the private investor shall be realized through
contractors and subcontractors; you could among them. I mention this
fact because it is the qualified private sector who realized most of
investments of strategic investors we are so eagerly seeking to attract
in Kosovo.

I also wish to add that the transaction for the privatization of KEK
Distribution shall preceded by several activities, encouraged and
supported by the Government, such as:
•    Division of managements, accounts, and staff according to
function/divisions of KEK jsc., namely mining, generation, distribution
and supply. This will be done with the aim of better allocating joint
assets, and to register them in capital asset registries; and
•    Division of roles and responsibilities between KEK – Distribution
and KEK – Generation with regard to environmental and social issues.

Slide 7
We are working to a achieve a greater use of our renewable energy
sources, ant to improve the efficiency of energy used everywhere in our
economy. Our aim is to meet the 20-20-20 objective by 2020, as recently
set by the European Union member states. For this purpose the
Government has planned to:
1.    Finalize a long-term national plan; 
2.    Submit to the Assembly the draft-Law on Energy Efficiency; 
3.    Finalize a strategy for the district heating sector, including
the connection of the District Heating Prishtina with TPP Kosovo B; 
4.    Give with concession to private investor the Zhur Hydropower Plant
5.    Start issuing with concession to private sector, in 2009, 16
small hydropower plants, in line with the studies pertinently carried
out;
6.    Improve energy efficiency in the private sector (business and households); and
7.    Asses further RES potentials and fund some model projects.
The realization of all projects mentioned above requires investors and private sector works.

Slide 8
In the near future, Kosovo will also connect itself to the regional
network of natural gas, and in what has recently been referred to as
the South European Gas Ring. All gas networks will be constructed only
with private investments and investors. The Government has not
envisaged any direct investments from its Budget for these natural gas
networks.  This is also provided in the draft-Law on Gas, currently
being reviewed in the Kosovo Assembly. On the other hand, MEM is
striving to promote an extensive penetration of the liquefied gas in
households.

Slide 9
The Republic of Kosovo has placed a top priority to the economic
development and fulfillment of the requirements for EU integration as
soon as possible. In this context, we are reforming our economy, and we
are doing this in line with the approach and directives of the European
Union.

Integration is an ongoing process which we are advancing through:
•    Energy Community Treaty,
•    EU Stabilization Association Tracking Mechanisms, and
•    Bilateral cooperation agreements with regional countries.

We have bilateral agreements with Albania, and soon we conclude such
agreements with Bulgaria and Macedonia and we aim to sign an agreement
with Montenegro. These agreements also provide for the direct or
indirect support for the inclusion of our businesses in the realization
of projects for the energy sector.
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*         *
Without further ado, I wish to reiterate once again the importance the
Kosovo Government places to these mainly private investments in the
energy sector.

Minister
Justina Shiroka Pula

Thank you!