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Prishtina, 17 October 2012 – The Minister of Economic Development, Besim Beqaj, said that today’s execution of the contract for privatization of the Kosovo Energy Distribution and Supply Company represents an important moment for the future of Republic of Kosovo’s economy and energy sector.

Beqaj made the said comments as the Chairman of the Government Privatization Committee during today’s ceremony marking the signature of the contract between the Government of Kosovo and Kosovo Calik-Limak Energy, in the presence of representatives from USAID, IFC, Deloitte and other institutions involved throughout the process.

‘In conformity with the country’s Constitution, we have determined that we will develop market economy and that we will provide the best possible services to Kosovo citizens, while one of our greatest obstacles to this end since the end of war was safe electricity supply,’ Beqaj said.

He added that the Energy Strategy adopted by the Kosovo Assembly stipulates three main objectives: stable electricity supply, affordable cost for citizens, and respect of international norms and standards in the sphere of environmental protection, and emphasized that the Government will maximally respect all these stipulations in the restructuring of the energy market.

‘We are here today closing a successful and transparent process, which further approximates Kosovo to the EU and offers its citizens the perspective of 300 million euro investments, which will be made in coordination with the Kosovo Energy Regulator’s Office. Kosovo Çalik & Limak Energy Company will be entirely subjected to ERO of the Republic of Kosovo, which is accountable towards the Assembly of Kosovo,’ Beqaj clarified.

GPC Chairman said that best practices from the region were used while drafting and compiling the contract. According to him, this contract guarantees all staff three-year employment contracts. Further, he added that the Government has taken over no obligations regarding failures to collect electricity bills, while Calik-Limak is obliged to purchase energy in the Republic of Kosovo, in conformity with market economy principles.

The Minister said that the contract also includes corporate guarantees that stipulate that Kosovo Calik-Limak Energy Company is obliged to perform all its obligations towards the transmission and generation companies, and, most importantly, the entire process is regulated by the ERO of the Republic of Kosovo.

For her part, Roxanne Suratgar, USAID representative, said that the signature of this contract marks a great step in the development of energy sector, towards ensuring regular electricity supply. She said that Calik and Limak have come to invest vast amounts here in order to revitalize KEDS. Such investments will serve the reduction of technical losses and improvement of service quality in the future.

‘According to the information we have, this process was managed in line with the highest international standards. USAID welcomes similar cooperation in the future, towards the achievement of our main objective – provision of sustainable electricity supply for Kosovo’s citizens,’ said Suratgar.

Filip Drapak, representative of the International Financial Corporation (IFC), the transaction representative in this privatization, stated that the KEDS privatization represents a success of the Government of Kosovo, as its ultimate beneficiaries will be Kosovo citizens, which will enjoy regular electricity supply.

He said that the transaction would not be possible without the support of all institutions involved in the process, including MED, MF, MLSW, MESP, USAID, Deloitte, KEK, KOSTT, etc. which were also part of the transaction evaluation process.

Deloitte representative, Andrew Smith, said that the privatization of KEDS was structured so as to reduce losses, improve electricity supply and, at the same time, protect the rights of employees. According to him, the privatization adhered to best international practices and is in compliance with the Energy Strategy of the Republic of Kosovo.

For his part, Nihat Ozdemir, representative of Kosovo Çalik-Limak Energy presented the profile of this consortium and its investment plans in Kosovo’s energy distribution network.

He said that this consortium manages energy distribution in five different countries, that it has over 5.1 million clients and serves 13 million inhabitants, adding that it pays special attention to service quality.

“Kosovo Çalik-Limak Energy Group will invest 300 million euro in Kosovo’s electricity distribution system in the forthcoming 15 years, hence we are well prepared, well experienced and ready to take over assets and initiate the said investments as soon as possible,’ said Ozdemir, adding that Kosovo citizens will have uninterrupted and more qualitative electricity supply.

Implementation Agreement

Share Sale and Purchase Agreement