PRISTINA, October 29, 2026—Kosovo offers important advantages for private investors, but persistent regulatory barriers continue to limit private investment and the creation of more and better-paid jobs, according to a new World Bank Group report released today.
The Country Private Sector Diagnostic (CPSD) identifies three sub-sectors where targeted policy reforms could unlock substantial private investment: utility-scale solar and wind electricity generation, business services, and building components manufacturing. Together, reforms in these sectors could mobilize an estimated US$1.2–1.5 billion in private investment and create 61,000–87,000 direct and indirect jobs over 5-10 years.
“To create jobs, generate domestic revenue, and foster sustainable and inclusive growth, Kosovo needs to seize untapped private investment opportunities and remove the barriers that stand in the way. The report helps Kosovo prioritize the most impactful actions to boost private sector growth while advancing broader development goals.” says Carole Megevand, World Bank Group Country Manager for Kosovo and North Macedonia.
Kosovo aims to increase renewable sources of energy to 63 percent of installed electricity generation capacity by 2031, from just 23 percent in 2024. This requires greater certainty for investors, particularly about who will buy their electricity. Priority actions include adopting a multi-year auction schedule and operationalizing liquidity guarantees for transmission system operator KOSTT under the country’s 2025 Rule on the Renewable Energy Support Mechanism. By 2035, these reforms could mobilize $1 billion in private investment, create 8,300 jobs, and cut emissions equivalent to an estimated 24 percent of Kosovo’s annual CO2 output.
Kosovo’s business services sector has expanded rapidly over the past decade, driven by rising European demand for outsourcing and digital services, digitalization, and cost-quality advantages. Employing a young workforce and offering comparatively high wages, the sector is a strong catalyst for the creation of better-paid jobs and possesses still untapped potential. However, growth is currently constrained by labor regulations, skills shortages, regulatory barriers, and unreliable electricity. Even narrowly targeted changes could bring significant results.
Policy reforms, such as specifying requirements for remote and hybrid work contracts, mandating a standardized labor inspection checklist, and enabling legal recognition of e-signatures for private commercial contracts, could improve competitiveness, support expansion, and attract additional private investment. Implementation of the report’s recommendations in this sector could attract $68 $177 million in new investment and generate 32,000 to 46,000 jobs.
Kosovo’s building components manufacturing sector is equally well-positioned to capitalize on strong domestic construction demand, on rising European appetite for energy-efficient building products, and on an established but underused export base. But policy-induced distortions and market failures raise operating costs, discourage investment, and limit firms’ ability to scale. Key constraints include unreliable and costly access to electricity, opaque land markets and cumbersome construction permitting, skills mismatches, limited access to working capital, and weak enforcement of product standards.
Addressing these barriers could mobilize $187–$296 million in private investment and create 21,000–33,000 jobs, while strengthening export competitiveness and deepening integration between manufacturing and Kosovo’s construction sector.
Recommended reforms include establishing a standardized long-term infrastructure use right agreement; establishing a fast-track mechanism for processing industrial construction permits submitted by manufacturing firms; requiring a structured on-the-job training module for Vocational Education and Training certification in building components manufacturing occupations; and introducing targeted, risk-based inspections of manufactured products.
The World Bank Group remains committed to supporting Kosovo with knowledge, financing, and expertise to expand private investment, create quality jobs, and build a more prosperous future.
