Electricity, Digital and Regional Interconnectivity in South East Europe

Over the past two decades, the Western Balkan six economies (WB6) have undergone a comprehensive economic and political transformation moving closer to the Single Market and the European Union (EU). Further effort is required, though, so that both regional GDP per capita may increase (from the 39.4% of the EU average in 2023) and more progress is achieved across several other key indicators and policy areas.

The energy market is one such area. For instance, energy productivity remained at around 80% of EU levels for the period 2020-23. In addition to this, recent OECD analysis shows that power losses continue to be a challenge for accessing reliable and affordable energy supply (source: Economic Convergence Scoreboard for the Western Balkans 2025).

Energy is indispensable for economic activity and a key pillar of competitiveness. The WB6 can achieve substantial economic, social and environmental benefits by ensuring that their energy sectors are competitive, well-governed and sustainable. Cross-border energy connectivity is a priority and remains underdeveloped, limiting the economies' integration into regional energy markets, reducing access to enhanced energy security and limiting resilience to external shocks.

Recent OECD analysis shows that the Western Balkan economies have yet to improve their frameworks in order to establish a truly competitive energy market and foster further sustainable economic growth in the long run.  This analysis assesses the existence, independence and effectiveness of regulatory authorities in each WB6 economy, as they are key actors of competitive energy markets. (source: Western Balkans Competitiveness Data Hub 2024).

The OECD project Electricity, Digital and Regional Interconnectivity in South East Europe will help Western Balkan economies, focusing on Albania, Kosovo*, North Macedonia and Serbia, address systemic connectivity challenges and regulatory gaps in the energy sector, strengthening the region’s ability to navigate the complexities of modern energy networks.

The project aims at strengthening the strategic framework for energy infrastructure and markets – particularly in the electricity sector. It will examine how deeper cross-border energy interconnection and more integrated modern digital technologies can improve energy efficiency, resilience and security, grid connectivity, and the transition to sustainable energy models. 

The project combines analytical and capacity-building work. A report will provide analytical insights into the electricity and energy connectivity, infrastructure and markets in the Western Balkans, focusing on the Western Balkans interconnectivity potential with EU Member States in the region. Through strategic engagement workshops and regional policy dialogues, the project will reinforce institutional capacities to improve the overall policy, legal and institutional frameworks governing the energy sector in the WB6 economies.

The project is implemented by the OECD South East Europe Regional Programme and runs from October 2025 until September 2027.