Kosovo says ContourGlobal begins arbitration in power plant dispute

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PRISTINA (Reuters) - Kosovo said on Thursday that power generator ContourGlobal had begun an arbitration process at an international court in a dispute over a scrapped power plant project.

The Ministry of Economy and Environment said it had received the notification from the International Arbitration Court (International Centre for Settlement of Investment Disputes).

London-listed ContourGlobal scrapped plans in March to build a $1.3 billion-worth 500-megawatt coal-fired power plant that would have provided around half of the electricity demand of Kosovo which is struggling with power shortages.

ContourGlobal, which declined to comment on Thursday, had said that Kosova e Re/New Kosova plant, which was opposed by environmentalists, was unlikely to ever be built unless the government made it a state project.

Kosovo's Economy Ministry said that project's closure, which was planned for May, has not been completed in time due to disagreements between the two parties.

It added that the government was working with state lawyers to follow the process and protect its interests.

A senior government official, speaking on condition of anonymity, said that ContourGlobal was demanding compensation of 20 million euros (18.07 million pounds).

(Reporting by Fatos Bytyci; Writing by Daria Sito-Sucic; Editing by Alexander Smith)