Kosovo’s transition toward a more sustainable and secure energy system will require substantial private investment in renewable energy. Attracting this capital, however, should not mean transferring every concern faced by investors onto the public balance sheet. The central policy challenge is therefore not simply how to eliminate investment risk, but how to determine which actors should carry specific risks and why.
The publication “Public Policy Approaches to De-Risking Private Investment in Renewable Energy in Kosovo” approaches de-risking as a matter of disciplined public risk allocation rather than a general package of protections for investors. Building on the European Union and regional renewable-energy policy context and Kosovo’s existing energy-sector conditions, the study examines the country’s renewable-energy risk landscape, available policy instruments, and their application to different investment models.
The publication distinguishes between three main categories of risk. The first consists of public-system risks, including unclear information on grid capacity, closed connection queues, uncertainty over permitting responsibilities, gaps in secondary legislation, inconsistent institutional interpretation, and insufficiently defined rules for areas such as energy storage, hybrid projects, self-consumption, corporate renewable-energy procurement, curtailment, and balancing responsibility. The study argues that these risks should primarily be reduced through better governance, regulation, transparency, and institutional coordination rather than compensated for through public guarantees or subsidies.
The second category comprises systemic and transitional risks. These can include first-mover uncertainty under new support schemes, payment concerns associated with public or regulated mechanisms, system-level curtailment, grid reinforcement that generates broader public benefits, and early revenue uncertainty for storage and flexibility projects. In such cases, targeted public risk-sharing may be justified. However, these instruments should be capped, appropriately priced, time-bound, transparent, and linked to measurable public value.
The third category covers private commercial risks, including construction cost overruns, inadequate site selection and yield assessment, engineering errors, technology underperformance, contractor failure, overly aggressive auction bidding, speculative reservation of grid capacity, normal exposure to merchant electricity prices, and expected equity returns. These risks should remain with developers, investors, lenders, contractors, suppliers, and operators who control them or are compensated for managing them.
Based on this framework, the publication argues for the development of a national renewable energy risk-allocation doctrine for Kosovo. Its guiding principle is straightforward: risks created by weaknesses in the public system should be reduced by the public sector; selected systemic and transitional risks may be shared where there is demonstrable public value; and normal private commercial risks should remain with private actors.
Such an approach can help Kosovo create a more transparent, predictable, and financeable renewable-energy market while protecting public resources. Effective de-risking should therefore not amount to public rescue of private investment, but to a clear and disciplined allocation of responsibilities that enables investment while ensuring that public intervention serves identifiable public objectives.