The hydropower sector in South-East Europe is grappling with a persistent cycle of feasibility studies that fail to translate into actual project development. This stagnation is not due to technical or economic shortcomings but arises from an institutional framework that favors analysis over decisive action. As countries in the region revisit the same projects with increasing sophistication, the lack of commitment to permits and financing continues to hinder progress.
Key river basins, including the Drina, Morača, Neretva, Vrbas, Ibar, Crna Reka, and Vjosë, frequently appear in planning documents. The financial assessments for large hydropower schemes range between €2–4 million per MW, while run-of-river projects are estimated at €1.5–2.5 million per MW. Despite refined annual generation estimates reaching down to the gigawatt-hour level, essential steps toward construction remain unaddressed.
The Upper Drina cascade serves as a notable example of this trend. With a combined capacity of approximately 400–450 MW and an expected annual output of 1.6–1.8 TWh, it is seen as a critical balancing asset for the region. However, total investment estimates have consistently ranged from €900 million to €1.2 billion, yet unresolved issues regarding governance and environmental responsibilities have stalled progress.
Montenegro’s Morača and Komarnica projects further illustrate this phenomenon. The Morača cascade, with a capacity of 230–250 MW and annual production between 700–800 GWh, has undergone analysis for over twenty years with capital expenditure projected at €600–800 million. Similarly, the Komarnica project offers a capacity of 170–180 MW, requiring investments of around €250–300 million. Both projects continuously adapt their plans in response to environmental concerns but avoid making definitive commitments.
Bosnia and Herzegovina also reflects this trend with its Upper Neretva and Vrbas projects, which promise combined capacities of 300–350 MW on the Neretva and 150–200 MW on the Vrbas, yielding potential annual outputs of 1.2–1.4 TWh. Investment requirements hover around €1.0–1.3 billion, yet repeated feasibility assessments dilute their bankability without leading to financial closure.
The Ibar cascade in Serbia has similarly been caught in this cycle, presenting a capacity of 100–120 MW and generating around 400 GWh annually with capital expenditures estimated between €220–280 million. Despite being touted as a catalyst for regional development, ongoing land ownership disputes and local opposition continue to push back any tangible progress.
Northern Macedonia’s Cebren and Galiste projects highlight how these patterns can scale up; with capacities ranging from 330–350 MW, generating nearly 1 TWh, they require investments between €700–900 million. Public investment models have been employed repeatedly to repackage these initiatives while avoiding explicit risk ownership.
The situation is similarly evident in Albania where hydropower constitutes a significant portion of energy generation. Before protective measures were implemented, studies indicated potential capacities between 300–400 MW. Additionally, mid-scale projects ranging from 30–50 MW, requiring investments between €50–80 million, face ongoing re-evaluations amid regulatory uncertainties.
This pattern across various nations reveals a common reliance on feasibility studies that serve more as placeholders than actionable plans. The deferral of risks inherent in large hydro projects—often involving substantial capital tied up for periods of 5–8 years, geological risks concentrated at the outset, and long-term environmental impacts—requires robust political commitment and financial backing that current institutional frameworks do not support.
The equilibrium established within hydropower feasibility reflects broader systemic issues; while studies can cost millions and construction can escalate into hundreds of millions, they create alignment without accountability. Until regulatory bodies redefine feasibility as an actionable phase culminating in irreversible commitments regarding permits and financing structures, South-East Europe’s rivers will remain underutilized assets on paper rather than operational energy sources.
This institutional inertia underscores that the challenges facing hydropower development are not analytical but deeply rooted in governance structures that prioritize avoiding risk over advancing essential infrastructure projects.
