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Supporting alignment with EU energy and climate standards in the energy and climate sectors
Project
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Project start date
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Status
Ongoing
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Project end date
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AFD financing amount
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€ 80 000 000
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Country and region
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Type of financing
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Beneficiaries
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Republic of Kosovo
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Type of beneficiary
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State
AFD supports Kosovo in implementing the energy and climate sector reforms that the country intends to pursue in order to align with European standards and support the convergence dynamics.
Context
A candidate for European Union membership since December 15, 2022, and a member of the Energy Community Treaty (CEn), Kosovo has already initiated reforms in the energy and climate sectors, with the goal of transposing the EU acquis, in line with its resulting commitments. With significant lignite reserves of 15 billion tons, Kosovo has the 5th largest reserve in the world, and its electricity mix is coal-dominated.
Despite improvements in energy intensity, it remains high compared to the EU-27 and regional averages. Aware of these challenges, the government is committed to decarbonization, renewable energy deployment, energy efficiency aiming for a net-zero economy and phasing out coal by 2050.
Description
To achieve this goal, the public policy loan reform program, co-constructed and co-financed with KfW, is structured across a public policy dialogue that includes 14 reforms and their disbursement indicators spread over 2025-2026.
The reforms support five main areas of work for the government and public sector actors:
- Decarbonizing the economy and improving climate change adaptation;
- Reforming the electricity market;
- Diversifying the energy mix and developing renewable energy sources;
- Reducing energy demand, particularly through energy efficiency;
- Reducing gender inequalities in the energy sector.
The program will be supported by technical assistance financed by AFD and carried out by Expertise France. The € 80 million budget loan granted to Kosovo is fully guaranteed by Kosovo. A grant for the Technical Assistance will be directly managed by the AFD Group (AFD funding, implementation by Expertise France).
Impacts
The project aims to contribute to a more resilient, low-carbon economic model, with a strengthened regulator, a more flexible electricity market, increased security of supply, enhanced deployment of renewable energy supply.
