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In an effort to complement a European Commission energy initiative earlier this month, a group of eight countries at the European Union's Southern and Eastern borders unveiled, on 24 October, a list of 35 energy infrastructure projects meant to increase cross-border energy interconnections in the region.

After their ministerial meeting in Belgrade, the Energy Community Council - an organisation composed of former Yugoslav and Soviet states - stated the projects will benefit from accelerated licensing procedures, coordinated regulatory conditions and investment incentives, with the broader aim of attracting investors.

These benefits are pretty much hand in hand with the ones the Commission will offer to about 250 cross-border priority energy projects unveiled on 14 October (see Europolitics 4730). In fact, the Council's so-called projects of Energy Community interest (PECIs) were selected using similar methodology as the EU did, including their contribution towards ensuring energy security.

The member countries of the Energy Community Council are Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Moldova, Montenegro, Serbia and Ukraine. The organisation, established in partnership with the EU, has been active since 1996. The eight countries committed themselves to adopt the EU's internal energy policies into their own laws. Among others, they agreed to implement relevant policies of the acquis communautaire, improve their regulatory frameworks and liberalise their energy markets.

Several of the 35 PECIs overlap with the infrastructure projects the EC announced last month. This means these projects connect at least one EU member state with its Southern and Eastern neighbours. Some examples are the Trans-Adriatic Pipeline (passing through Greece and Italy), the Ionian-Adriatic Pipeline (passing through Croatia), and electricity interconnectors between Croatia and Bosnia and Herzegovina, Romania and Serbia, and Romania and Moldova.

PECIs involving at least one member state also fall under the Commission's own project list, and will be eligible for EC grants over the next years. The other PECIs are already receiving funding for preparatory work and technical assistance from the Western Balkans Investment Framework and the Neighbourhood Investment Facility, both representing a combination of EU funding and private donor contributions. It is not yet clear if and what kind of funding the PECIs will receive for the construction period.

Energy Commissioner Gunther Oettinger, who was also at the meeting, said the "PECI label will help to attract much needed investment into the region". He estimated that to hover at almost 40 billion by 2020.

"However," he added in a statement, "the lack of progress on achieving effective market opening and the regional integration of energy markets is worrying". He called on the Energy Community Council to make the adoption of the EU's third energy package - meant to further open up the gas and electricity markets within the Union - "a key priority".

In fact, in their first ever dispute settlement case, the Council found that Bosnia and Herzegovina's current legislation covering the gas sector fails to implement the acquis communautaire on gas, thus representing a breach of the Energy Community's law. The ministers called on the country to rectify the breach no later than June 2014.

The ministers of the eight member countries decided to extend the duration of the treaty covering the organisation for a period of ten years. They established a working group tasked with assessing the shortcomings of the current treaty and to propose improvements. The mnisters named Jerzy Buzek, former president of the European Parliament and former Polish prime minister, as chairman of the group.
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Publication:European Report
Geographic Code:4E0EE
Date:Oct 25, 2013

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