ELECTRIC POWER SYSTEM DEVELOPMENT STRATEGY STATEM ENT OF PRINCIPLE

Electricity is an essential commodity for most individuals, businesses, and industries in Kosovo, and therefore must be available in a stable, reliable and reasonably priced manners. Kosovo’s current electrical industry is undergoing a transformation from a vertically integrated monopoly. Future electricity production w ill be subject to increased regional competition and higher environmental standards. Because electricity is so important to individuals and to industrial sectors, public policy must take balanced approach and phase in the competition over a prudent time frame. Over the medium term, the introduction of increased competition w ill encourage new market entrants for domestic and export electricity supply. Appropriate regulatory framew ork w ill be introduced to that respect. Advantage of having an abundant an economical domestic resource – lignite should attract private sector and result in a more market-driven electricity industry and improved eff iciencies for all customers. These changes w ill result in sustainable electricity supply for Kosovo. This scenario is based on private sector principles that recognize the need for fair rates of return for investors and a consistent, predictable business climate that encourages new investments