Kosovo’s shift to a liberalized energy market has prompted business pushback, with courts stepping in to ensure stability as companies navigate rising costs, limited suppliers, and a lack of clear regulatory guidance, according to Lex Business Managing Partner Vjosa Shkodra.
“As of July 2025, Kosovo is undergoing a particularly complex intersection of legal reform, economic transition, and political uncertainty,” Shkodra reports. “We’ve passed the halfway point of the year, and while major steps have been taken to align with the EU energy market standards, as required, there are still significant structural weaknesses, judicial challenges, and institutional instability.”
“A key turning point came on June 1, 2025, when, following a formal energy regulatory notification issued a few months ago, all businesses in Kosovo with more than 50 employees or an annual turnover exceeding EUR 10 million are now required to procure electricity from the free market,” she notes. “This is in line with the law and Kosovo’s strategic objectives, but it’s been met with strong resistance from both domestic and foreign companies.”
According to Shkodra, the resistance started building in late May. “Dozens of large enterprises protested, arguing that the change would drastically increase costs due to the limited number of energy suppliers currently operating in the free market,” she says. “Regulated tariffs previously offered stability, and this sudden shift, without any transitional period, left many companies unprepared to seek financing or alternative supply solutions. Chambers of commerce across the country raised concerns, with legal uncertainty becoming the primary complaint, also among foreign investors.”
“In late June and early July, the Commercial Court of Kosovo began taking on a central role,” Shkodra continues. “Several businesses filed lawsuits challenging the regulator, and in a handful of decisions, the court sided with the companies, granting interim measures to suspend the new requirement. These rulings have been viewed as a clear signal of judicial awareness and a commitment to preserving legal predictability in the face of rapid regulatory shifts.” However, it remains to be seen how higher courts will approach the matter, as first-instance rulings alone cannot establish a definitive judicial practice.
Importantly, Shkodra says, “the regulator maintained that these court decisions apply only to the individual companies that filed suit, leading to a fragmented regulatory landscape: some businesses remain under the old, regulated tariffs, while others are now subject to market-based rates.”
Further complicating the situation, according to Shkodra, is the ongoing political deadlock. “Since parliamentary elections in February, Kosovo has been unable to elect a speaker or form a government,” she stresses. “This stalemate has caused widespread stagnation and is already having clear economic implications. Foreign investors, many of whom view Kosovo as a strategic market, particularly for infrastructure and energy projects, are increasingly hesitant due to the lack of a predictable and functioning regulatory environment.”
Still, “looking ahead, we have to stay both realistic and hopeful,” Shkodra emphasizes. “Kosovo has made progress in aligning with EU standards. In effect, the judiciary has, in practice, become the primary venue for resolving disputes and interpreting the boundaries of reform. But I am equally hopeful that Kosovo’s legislative and executive branches will re-engage fully to ensure reform is implemented with predictability, consultation, and fairness.”
