Turkish Consortium and Egypt's Elsewedy Bid for Kosovo Power Grid

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Researched by Industrial Info Resources (Sugar Land, Texas)--A Turkish consortium of Limak Holding (Ankara, Turkey) and Calik Holding (Istanbul, Turkey) and Egyptian company Elsewedy Electrics (CA:SWDY) (Cairo, Egypt) have filed bids to buy KEDS, the distribution unit of Kosovo's power utility KEK, economy minister Besim Beqaj said. KEDS serves 400,000 customers and operates Kosovo's entire distribution network.

The bids will be evaluated only according to their financial parameters, Beqaj said, as quoted in a statement from the economy ministry published on its Web site. The government of Kosovo will not be obliged to cover future losses that KEDS may sustain from delinquent clients, it added.

In March, Kosovo decided to extend until April 20 the deadline for submission of bids in the tender for the privatization of KEDS in response to a request by the pre-qualified companies Limak, Calik, Elsewedy and Turkish-Bahraini consortium TAIB. The government committee for the privatization of KEDS also decided to allow the pre-qualified companies to form a consortium among each other.

The company's electricity production rose 5% to 1,580 megawatts (MW) in the first quarter, and sales rose 7.1% to $49.4 million on quarterly basis. The company has two lignite-powered active power plants in Kosovo: Kosovo A has five units, with a total production capacity of 1,500 gigawatt-hours yearly. Kosovo B has two units. The company has 18,989 kilometers of power lines with a 400,000 customers.

Under the privatization plan, the network's new owner will be responsible for collecting debts totaling $509 million accumulated over 13 years. In return, the winning bidder will receive 20% from each collected bill.

Kosovo, which remains one of the poorest countries in Europe, is looking to attract foreign investment to help tackle a 40% unemployment rate. In late April, the International Monetary Fund approved a $140.8 million loan for Kosovo, after cutting off funding last year in a dispute over pay raises for civil servants. The new 20-month stand-by arrangement will back a program to ease the country's fiscal pressures and help the government strengthen its financial structure.

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