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The European Commission greenlighted the proposed reform agendas of Albania, Kosovo*, Montenegro, North Macedonia and Serbia, under the Reform and Growth Facility criteria. It opened the way for funding from the Growth Plan of EUR 2 billion in grants and EUR 4 billion in highly concessional loans. Three governments are obligated to adopt renewable energy auction plans.
Following approvals from the Council of the European Union, the European Commission approved the so-called reform agendas of Albania, Kosovo*, Montenegro, North Macedonia and Serbia. They committed to socio-economic and fundamental reforms to spur growth and convergence with the EU under the Growth Plan for the period through 2027.
Notably, Bosnia and Herzegovina is the only Western Balkan country that failed to submit a proposal.
The criteria was set under the EUR 6 billion Reform and Growth Facility. It consists of EUR 2 billion in grants and EUR 4 billion in highly concessional loans, as the EU defined them.
Beneficiaries obliged to fight corruption
At least half of the total amount would come through the Western Balkans Investment Framework (WBIF). The remainder would be loans to the treasuries. Payments will be made twice a year by the end of 2027 upon approval, the European Commission explained.
WBIF is a joint financial platform of the European Commission, member states, financial organizations and Norway, aimed at enhancing cooperation in public and private sector investments for the region’s socio-economic development and contributing to the European integration of the Western Balkans.
The documents include obligations for beneficiaries to prevent, detect and correct fraud, corruption, conflicts of interest and irregularities. The funding depends on achieving milestones from the reform agendas.
In the environmental and climate protection and energy segment, the measures are mostly for meeting existing obligations. They include the adoption and implementation of the EU’s Electricity Integration Package and Renewable Energy Directive RED3, alongside gradual power tariff adjustments to market prices, accompanied with measures to address energy poverty.
Some of the tasks concern targets from national energy and climate plans (NECPs) like for energy efficiency. There are also obligations regarding air quality and the just transition for coal workers, firms and regions.
Albania to auction another 300 MW of renewables
Albania needs to adopt a three-year auction plan by the end of December for at least 600 MW of renewable energy, but the figure includes 300 MW of solar power from the last round. The entire capacity must be installed by June 2027.
The EU approved EUR 922 million. The loans to the treasury amounts to EUR 429 million. The WBIF budget consists of EUR 228 million in loans and EUR 265 million in grants.
Kosovo* said it would adopt a just transition roadmap with timeline by the middle of next year
Kosovo* is required to open the retail electricity market in parallel with a transitional phaseout of the so-called bulk supply agreement. Public intervention in price setting for end users can only be temporary and limited for households and small and medium-sized enterprises. The deadline is June 2026.
The government needs to adopt a just transition roadmap with an implementation timeline and indicators, by the end of June of next year. A three-year auction plan and a public call to bids for 150 MW in wind power are due by the end of 2024.
By December 2027, Kosovo* would add 100 MW in solar power and have contracts signed for a minimum of 150 MW in renewables. The Ministry of Finance is borrowing EUR 411 million out of the EUR 883 million package. Loans through the WBIF amount to EUR 219 million, and the remaining EUR 253 million are grants.
North Macedonia aims for 0.8 GW of new solar, wind power capacity
North Macedonia said it would increase solar and wind power capacity by at least 0.8 GW by June 2027 in line with its NECP and targets agreed within the Energy Community. The government vowed to gradually decrease public intervention in power prices to 30% by June 2027.
Interestingly, 81 municipalities are in plan for street lighting refurbishment. The treasury is getting EUR 349 million in loans. North Macedonia is eligible for up to EUR 750 million in funding. WBIF would provide EUR 186 million in loans and EUR 215 million in grants.
Serbia has vowed to increase solar and wind power capacity by 1.5 GW in total within two years
Serbia highlighted the target for new solar and wind power capacity of a combined 1.5 GW by the end of 2026, citing its Integrated National Energy and Climate Plan.
The country can draw EUR 1.59 billion. The Ministry of Finance can borrow up to EUR 738 million. The WBIF items are EUR 393 million and EUR 455 million, where the grants figure is again larger.
Montenegro to replace most coal-fired heating systems by end-2027
Montenegro said it would publish a three-year auction plan for at least 400 MW and initiate the first round by the end of June. At least 200 MW in total solar and wind power capacity would be commissioned by mid-2027, the document reads.
Before the end of the funding period, a total of at least 90% of individual heating systems in public buildings and 70% of individual heating systems in private buildings need to use clean fuel. The plan includes a building renovation program for the Pljevlja coal region with financing for energy efficiency and the replacement of heating systems.
Montenegro can receive a maximum of EUR 383 million of which the treasury is entitled to EUR 178 million. WBIF would provide EUR 95 million in loans and EUR 110 million in grants.
Focus on energy investments including Gornje Kruševo hydropower project
The government’s list of energy projects for funding via the EU’s Growth Plan for the Western Balkans is worth EUR 495.5 million. In the proposal, Montenegro said the construction of the Gornje Kruševo hydropower plant would begin within two years. The location is on the Piva river, downstream from the Mratinje hydroelectric facility. It is upstream from Donje Kruševo, a site near the border with BiH which was also considered.
Montenegro estimated the investment in Gornje Kruševo at EUR 160 million
The EUR 160 million project is for 82 MW and an annual output of 170 GWh, according to earlier announcements. State-owned power utility Elektroprivreda Crne Gore (EPCG) is discussing with France’s EDF the possibility of joining the investment.
The plan includes 10,000 rooftop photovoltaic systems worth an overall EUR 66 million, increasing the capacity of an interconnection line with BiH, to Trebinje, in a EUR 12 million investment, and another transmission link leading to the neighboring country from hydropower plant Piva, upstream from the Gornje Kruševo location. The government valued the project at EUR 70 million.
The list continues with an investment in smart power metering of EUR 12 million and the reconstruction and expansion of the power distribution system, worth EUR 12 million and EUR 21.5 million, respectively. Another EUR 4.5 million was allocated for the replacement of power substations.
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