'Review of Electricity Supply and Demand in Southeast Europe' is part of the World Bank Working Paper series. These papers are published to communicate the results of the Bank's ongoing research and to stimulate public discussion. This paper reviews the power sector demand-supply balance in Southeastern Europe, covering Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Former Yugoslav Republic of Macedonia, Romania, and Serbia and Montenegro (including Kosovo), and identifies the magnitude of generation investments needed in this evolving market. It proposes mechanisms to reduce investment requirements, namely energy efficiency improvements and increased trade, and provides a brief assessment of technical and institutional barriers to trade.