A financing agreement that will enable the EU to transfer 75 million euros to Kosovo as direct financial assistance to help its citizens and business to cope with the energy crises, was signed on Friday in Prishtina.

Energy expert Lulzim Syla, told Prishtina Insight that the European Commission package will have a big impact on the economy of Kosovo despite this winter having been easier than expected because it has not been very cold.

“Such a package will assist the situation because funds will be distributed to families, businesses and institutions to cover costs of energy efficiency measures, renewable energy and electricity stabilization”, said Syla.

According to Syla, it would be beneficial if an additional fund from the Government was added to this package to show the commitment during the energy transition.

Financial assistance for citizens to recover from the energy crisis has been necessary to assist citizens who turned to buying more wood to cope with the winter.

Artan Mustafa, lecturer and  social policy researcher at University for Business and Technology told Prishtina Insight that the grant from the Commission for household energy consumers has proven to be successful. 

Regarding this new financial agreement, which is a component part of the EU Energy Support Package for the Western Balkans, Mustafa said that it is welcome and enables the continuation of such support packages in Kosovo.

Out of 75 million euros, one third, or 25 million euros, will go towards subsidizing energy bills and alternative heating methods such as wood and pellets for around 200,000 households, including pensioners, single mothers, social scheme holders and marginalised people and families.

However, Mustafa considers that the Government should maintain universal support, rather than a targeted approach, because poor families ultimately gain more from the universal approach.

“As far as efficiency is concerned, the Government should use the momentum of the political agreement of February 27 to encourage as many funds as possible for the construction of a strong infrastructural base for electricity – which is an important priority in public policies,” he said.

How much will the package help Kosovo’s energy economy ? 

Kosovo paid over 200 million euros for electricity imports last winter due to the energy crisis and the underproduction of energy by the Energy Corporation of Kosovo.

Energy expert, Trim Tërnava, told Prishtina Insight that the aid helps local institutions to mitigate the effects of the electrical energy price crisis accrued during the previous 2 years.

“I consider that the focus in the future should be on measures that have a greater and longer-term impact, which include investments in efficiency and renewable resources,” said Tërnava.

According to him, around 40 million will be spent on short-term measures for citizens such as: subsidizing electricity bills and subsidized savings scheme, for the period January – April 2023, where citizens will receive a subsidy for the saved value of electricity. The remainder of this fund will be used for measures that have a greater impact and are sustainable.

15 million euros will go towards motivating the public to save energy by providing households with energy bill subsidies equal to the amount of savings they achieved in comparison to the same month last year, according to the financial agreement.

This measure should benefit some 160,000 households.

According to the agreement the remaining 35 million euros will be used to help households and micro, small, and medium enterprises increase energy efficiency. Some 12,000 families residing in private houses or apartments in social housing will be supported with improving thermal insulation (facades, windows, and doors), and 10,000 more will be supported in buying energy-efficient appliances.

Some 1,000 medium enterprises will be supported to buy and install energy-efficient heating systems and renewable energy sources, such as solar photovoltaic or thermal panels.

The agreement was signed by EU Ambassador in Kosovo, Tomas Szunyog, and Kosovo Deputy Prime Minister, Besnik Bislimi.

Besnik Bislimi said that EU’s support of 75 million euros complements the Government’s energy support scheme: 

“The funds provided will be used by the Kosovo Government to continue implementing the measures planned for reducing the socio-economic impact of the energy crisis on our citizens,”  Bislimi said, while signing the agreement.

The entire package will be delivered in two parts for Western Balkans, with the first one focusing on providing direct support to the most affected families and businesses and the second one on clean energy transition of the region and lowering dependence on Russia’s fossil fuels.

Financial support for Kosovo and the countries of the Western Balkans to face the energy crisis was first announced by President of the European Commission Ursula von der Leyen in November of last year during the Berlin Process.