Republic of Kosovo: Selected Issues

International Monetary Fund

No 2023/055, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper focuses on challenges and opportunities in Kosovo’s electricity sector. Energy market pressures in Europe are likely to continue throughout 2023. Higher energy prices represent a heavy blow for Kosovo’s current account. The tariff-setting framework is broadly sound, but the increase in European electricity prices has led to challenges. Higher European electricity prices have stressed the sector’s flows, creating liquidity choke points. Higher European electricity prices and lower domestic electricity supply may result is significant stress for Kosovo’s energy sector and budget. In the short term, more efficient use of electricity should reduce demand and contribute to balance the system in 2023. In the medium term, boosting energy efficiency and diversification away from lignite is priority. To that end, creating a fund for the renewal and expansion of domestic electricity generation capacity in green technologies could be explored. Starting to explore carbon pricing would strengthen price signals and result in more efficient demand and less carbon intensity.

Keywords: tax revenue growth; policy implication; Electricity supply chain; central banks in Kosovo; electricity sector; Electricity; Income; Natural gas sector; Tax administration core functions; Europe; Global (search for similar items in EconPapers)
Pages: 24
Date: 2023-01-27
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