Kosovo can mobilise up to $1.5 billion of private investment and create up to 87 thousand new jobs over the next five to ten years if targeted reforms are undertaken in three areas of the economy.
So it says in a new World Bank Group report that evaluates private sector potential in Kosovo and identifies obstacles that continue to limit investment and job creation with higher wages.
According to the report, solar and wind energy production, business services and construction components production are three areas with the greatest potential to attract private investments and boost economic growth.
The World Bank estimates that Kosovo has important priorities for private investors, but regulatory barriers and barriers to market functioning continue to limit the exploitation of this potential.
To create jobs, generate local income and promote sustainable and inclusive economic growth, Kosovo must take advantage of untapped opportunities for private investment and remove barriers to to, Carole Megevand, World Bank Group manager for Kosovo and North Macedonia, has declared.
She has stressed that the report aims to help Kosovo give priority to reforms that may have the biggest impact on private sector development.
Renewable energy potential for $1 billion investment
One of the main areas identified in the report is energy production from renewable sources. Kosovo aims to make up until 2031, renewable resources will account for 63 percent of the capacity installed for electricity production, compared to 23 percent in 2024.
For achieving this goal, the World Bank estimates that more security is needed for investors, especially in terms of buying the electricity they produce.
Among the recommended measures are the definition of a multi-year auction calendar and the operation of liquidity guarantees for the transmission system operator KOSTT, within the framework of the mechanism for renewable energy.
According to the report, reforms in this sector can mobilise by 2035 about a billion dollars of private investment and create approximately 8,300 jobs. They may also contribute to lowering greenhouse gas emissions to an equivalent level of about 24 percent of the annual emissions of CO2 in Kosovo.
Business services can create up to 46 thousand jobs
The business service sector has expanded over the past decade, driven by growing demand in Europe for abroad contracted services (outsource) and digital services.
The World Bank estimates that the new workforce, competitiveness costs and quality of services give Kosovo priority in this area. The sector is considered potentially to create jobs with higher salaries, but its expansion is hampered by labour regulations, lack of professional skills, other regulatory barriers and unstable electricity supplies.
The report recommends defining clear requirements for remote and hybrid work contracts, standardisation of labour inspection procedures, and legal recognition of electronic signatures in private commercial contracts.
Implementation of these reforms could attract between 68 and $17m and create $32,000 to 46 thousand jobs.
Construction production, up to $246m in investment
A considerable potential also represents the production of construction components, which can benefit from the growing domestic demand for construction and interest in European markets in higher energy efficiency.
However, according to the report, the sector faces a host of obstacles, including uncertain and costly access to electricity, land market confusion, complex procedures for construction permits, inadequate professional skills, limited access to district capital and poor implementation of product standards.
The World Bank estimates that addressing these problems can mobilise between $17 and $296m and create between $21,000 and 33 thousand jobs. These reforms could also help boost exports and strengthen links between production and the construction sector.
Among the key recommendations are the creation of an accelerated mechanism for reviewing the requirements for industrial permits, including practical training in education and professional skills programmes, as well as the passing into inspections of construction products based on risk assessment.
The World Bank has stressed that it will continue to support Kosovo with expertise, financing and knowledge of expanding private investment and job creation.
