Bank expected to exit coal with ‘zombie’ Kosovo project

By Jean Chemnick | 06/14/2018 07:52 AM EDT

The World Bank is poised to pull the plug on its last coal-fired power project with its imminent withdrawal from a long-debated plant in Kosovo.

The World Bank is poised to pull the plug on its last coal-fired power project with its imminent withdrawal from a long-debated plant in Kosovo.

Bank officials have met with the Kosovar government over the last week to discuss the proposed project outside the capital city of Pristina, which would provide 500 megawatts of power to one of the poorest countries in Europe and is the only coal project the bank is currently considering financing. A report is due out soon that will likely stress the availability of alternatives.

"The pace of technology change in the energy sector is moving fast, especially in renewables, such as solar, wind, and storage, where prices continue to decline," said a World Bank spokesman. "Our analysis is taking into account these developments, and we are keeping the government informed."


The World Bank grants an exception to its usual practice of not backing coal-fired power only if there are no other options to provide a country with affordable power. But with solar power now weighing in at 3 cents per kilowatt-hour or less in some countries, the Kosovar plant seems unlikely to get a green light.

Environmentalists are hopeful that the project is on its last legs. "I would say that from where I sit, the writing’s on the wall," said Justin Guay, director of clean energy and clean air at the ClimateWorks Foundation. "There’s a new reality on the ground, and it’s totally changing the equation."

Guay noted that the Kosovar project has been revived a few times since it was first proposed in the early 2000s. He called it "the zombie that never dies."

"But I think this actually is the beginning of the end," he said, citing both World Bank President Jim Yong Kim’s focus on climate change and the shifting economics of energy.

The announcement would fall in line with Kim’s commitment last year at a climate summit in Paris to an effective ban on the bank’s investing in upstream petroleum development. It would also serve as an example of the Trump administration’s waning influence over the World Bank, which historically has closely hewed to U.S. interests. The Trump administration has instructed the bank’s U.S. directors to allow fossil fuel projects to gain access to financing.

Civil society and some politicians in the Balkan country say the project would be unnecessarily polluting and large. The project itself has dwindled in scale from 2,100 MW to 500 MW because the country doesn’t need much power. Guay likened it to buying an SUV to navigate European alleyways.

And greens have long held there are cheaper and cleaner options to fill the power gap that does exist. Former World Bank clean energy specialist Dan Kammen wrote a report in 2016 detailing some of those, including better efficiency and regional integration measures to prevent power from leaking.

Nezir Sinani, a director at the nonprofit Bank Information Center Europe and an anti-coal activist from Kosovo, noted that years ago, a previous design for the plant almost gained the World Bank’s approval. "It has been quite a roller coaster, I would say," he said.

But Sinani said he hopes the bank will help fund alternatives to the coal plant instead of just walking away.

"There’s need for more power there, and there are better options than coal, so I hope they take them on board and help the government to implement those," he said.