VZCZCXRO6697
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHBW #1704/01 3541311
ZNR UUUUU ZZH
R 201311Z DEC 07
FM AMEMBASSY BELGRADE
TO RUEHC/SECSTATE WASHDC 1937
INFO RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/USDOC WASHDC 0032
RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 BELGRADE 001704 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
USDOC FOR 4232/ITA/MAC/EUR/OEERIS/SSAVICH 
 
E.O. 12958: N/A 
TAGS: ECON ENRG SR
SUBJECT: SERBIA: ELECTRICITY AND KOSOVO 
 
SUMMARY 
------- 
 
¶1. (U) Recent discussions with the head of a large electricity 
trading firm and others indicate Serbia does not plan to break 
electricity connections with Kosovo.  Serbia, however, remains firm 
in only dealing with UNMIK on Kosovo energy issues, and has moved 
away from electricity "donation" to seeking to operate an 
electricity company in Kosovo.  End Summary. 
 
No Technical Preparations to Cut Electricity 
-------------------------------------------- 
 
¶2. (SBU) A/DCM met with the head of electricity trading firm EFT, 
Vuk Hamovic, on December 12 to discuss electricity trading in the 
region and specifically with regard to Kosovo.  EFT is the largest 
corporate trader of electricity in the Balkans.  According to 
Hamovic, he sees no indication on the technical side that Serbia 
will cut off electrical connections in Kosovo.  He said that on the 
system management side, they have seen no indications of 
preparations to do this and they would be very concerned if they did 
expect Serbia to take this action.  EFT could loose millions of 
dollars if they were unable to deliver on electricity supply 
contracts with KEK in Kosovo. 
 
External Pressure if Electricity is Cut Off 
------------------------------------------- 
 
¶3. (SBU) Hamovic said that it was technically possible to cut the 
connection between the Serbian grid and Kosovo's grid at the Ibar, 
but that doing this would have a significant effect on the stability 
of the grid within Serbia and in the region.  He noted that Romania 
and Bulgaria's system operators would put pressure on Belgrade if 
the grid's stability were negatively affected by cutting off Kosovo. 
 
 
UNMIK Discussions on Electricity "Donation" 
------------------------------------------- 
 
¶4. (SBU) UNMIK representatives met with Energy Minister Popovic on 
December 5 to continue discussions on electricity donations to 
Kosovo-Serbs.  Fayez Risheg of UNMIK Belgrade told A/DCM following 
the meeting that Popovic did not react directly to UNMIK's proposed 
agreement for energy donation, saying that it was "with the 
government."  Popovic focused instead on the Energy Ministry's 
desire to begin billing Serbian customers via an entity other than 
KEK.  Popovic asserted that billing of Kosovo-Serb customers was 
needed to drive down consumption.  Popovic said that the Ministry 
would like to establish a supply company to bill customers served 
under the "donation" scheme, but this company could be established 
and registered only through a process that dealt with UNMIK, and not 
the Provisional Institutions. 
 
Energy Community Meeting 
------------------------ 
 
¶5. (SBU) Belgrade hosted the regional Energy Community Ministerial 
meeting December 17-18.  Serbia is the current President of the 
Energy Community and the incoming President is UNMIK.  USAID and 
UNMIK representatives who attended the meetings told A/DCM that 
there were no difficulties between the Serbian and UNMIK 
delegations.  During Popovic's December 5 meeting with UNMIK he 
stressed that Serbia could only accept UNMIK as Pristina's 
representative in the Energy Community, and "not any other entity 
that Brussels might be thinking of." 
 
¶6. (U) This theme, that UNMIK is the only entity the Serbian 
government will deal with, was reiterated to Poloff during a 
December 20 meeting with Kosovo Ministry State Secretary Porokovic. 
Porokovic added that Belgrade could not deal with an EU Mission, 
since Belgrade "could not recognize such an entity" without UN 
Security Council approval. 
 
Comment 
------- 
 
¶7. (SBU) Politics remain a key factor in any future Serbian 
government decisions on electricity flows to Kosovo, but it was 
important that politically connected EFT does not expect electricity 
cuts.  Risheg commented to A/DCM that no Serbian government official 
has ever directly threatened to cut off electricity in any of their 
public statements or in his meetings on the issue.  This tracks with 
Post experience, including high level meetings where the issue of 
electricity has been dismissed.   At the same time, the Serbian 
government is setting out firm positions on dealing only with UNMIK 
and is making clear they do not plan to deal with EU-based 
institutions in Kosovo.  End Comment. 
 
 
BELGRADE 00001704  002 OF 002 
 
 
 
MUNTER