Focus on Energy, 2010 - Karanovic & Nikolic

SERBIAKOSOVOКосово/ KosovëPRISTINAINTRODUCTIONKosovo declared its independence from Serbia in february 2008. Although some countries recognised theRepublic of Kosovo as an independent country, from the point of view of the United Nations and a majorityof countries, Kosovo is still formally a part of Serbia.34Considering the excellent opportunities that are available across different business sectors, Kosovo isincreasingly becoming an attractive place to do business. As a result, interest from foreign investors hasbeen increasing steadily in recent years and this has resulted in an increase in foreign direct investment(“FDI”). According to the Kosovan Business Registry data for 2007, there are 2,012 companies of foreignand mixed ownership that have already invested in Kosovo.Kosovo joined the Multilateral Investment Guarantee Agency in 2009. It is expected that this will furtherencourage foreign investment and support “World Bank” initiatives in Kosovo.FOCUS ON ENERGYThe local economy is nevertheless hindered by Kosovo’s still-unresolved international status, which hastraditionally made it difficult to attract investment. The province’s economic weakness has produced athriving black market economy. The prevalence of official corruption and the pervasive influence of organizedcrime gangs continues to cause serious concern internationally.Kosovo has a reported foreign debt of 1,264 billion USD that is currently being serviced by Serbia.REGULATORY FRAMEWORKBasic Energy LegislationThe energy sector in Kosovo is governed by the following laws: (i) The Law on Energy; (ii) The Law on theEnergy Regulator; (iii) The Law on Electricity; (iv) The Law on Natural Gas; (v) The Law on Spatial Planning;and (vi) the Law on Mines and Minerals. The basic energy legislation was drafted in accordance with EuropeanUnion (“EU”) Directives and in compliance with the principles of the Athens Process for the creationof the Regional Energy Market 1The main bodies which create, regulate and supervise the energy sector in Kosovo are the Ministry of Energyand Mining of Kosovo (“MEMK”) and the Regulatory Energy Office of Kosovo (“REOK”).MEMKMEMK has a wide scope of functions and is the main creator of the long-term and short-term energypolicy in Kosovo, in close cooperation with the Kosovo government. MEMK is also charged with drafting1 Read more on the Athens Process in the “INTRODUCTION TO SOUTH EAST EUROPEAN REGIONAL ENERGY COMMUNITY TREATY”section