USAID Kosovo-funded Support to the Kosovo Energy Corporation
Under a U.S. Agency for International Development (USAID)-funded project, Tetra Tech was responsible for building the capacity of the Korporata Energjetike e Kosoves (Kosovo Energy Corporation, or KEK), a vertically integrated mining, generation, and distribution company with 450,000 customers and 7,800 employees. The project objectives were to improve the electric utility’s commercial performance and support its privatization.
Throughout the project, Tetra Tech adopted both top-down and bottom-up approaches to delivering technical assistance to KEK. KEK embedded resident staff within the utility’s headquarters in Pristina and each of its districts. Staff members served as advisors on day-to-day management issues to the managing and division directors. In addition, KEK experts focused on daily utility operations, particularly finance and accounting, field operations, procurement, IT, human resources, and internal controls and anticorruption. Tetra Tech:
- Provided strategic guidance and technical assistance to the KEK managing director, with an emphasis on enhancing the company’s revenues, improving security of electricity supply, reducing the utility’s environmental impact, and implementing internal reforms
- Strengthened KEK’s overall business processes to enable it to operate using international best practices and improve its asset value
- Supported the district operations of the KEK’s Network and Supply Divisions to increase collections
- Provided advisory support in the privatization process of the distribution company and KEK’s remaining mining and generation assets
Tetra Tech also devised demonstration projects to show employees how to be effective agents of change, and implemented formal and informal training to KEK staff.
- Tetra Tech established a new independent Internal Audit Unit within KEK to reduce fraud, waste and abuse, and assisted KEK in improving its financial recording and reporting. These activities resulted in an independent auditor’s report that contained no qualifications of its financial statements for 2011—a first in KEK’s history.
- Tetra Tech assisted KEK in engaging with minority community leaders to enter into agreements for standardizing service and payments in areas where no payments had been made.
- Tetra Tech supported KEK’s ambitious capital investment program totaling nearly €300 million, which stabilized KEK’s mining operation and improved the capacity and reliability of its power plants. Generation from KEK units increased every year of the project, reaching an all-time high in 2013, about 500,000 megawatt hours more than the previous record. The improvements in KEK’s generation capacity meant that by the end of the project KEK was able to service its customer load – something that had not been achieved since before 1999.
- Tetra Tech supported KEK management‘s efforts to reduce the environmental impact of its power plants. Most notably, Tetra Tech advised KEK on replacing the old electrostatic precipitators in Kosova A plant with new electrostatic precipitators and installing a wet ash transportation system, at a combined cost of over €37 million, leading to a significant reduction in its dust and particulate emissions. Tetra Tech assisted KEK with unbundling its distribution and supply business—to include divesting assets, contracts, and employees—in preparation for its privatization. Tetra Tech also provided support to KEK management, together with the Government of Kosovo and its advisors during the privatization process, which concluded on May 8, 2013, when KEK’s distribution, network, and supply functions were sold to a Turkish consortium.