"Until now we have three confirmed dead and many injured," Derat Rukiqi, the chairman of plant's management board told AFP.
The head of Pristina's emergency centre Basri Lenanji said 13 people had been taken there with injuries.
Ambulances were seen speeding to and from the blast site, which was sealed off by police.
Rukiqi said the blast - heard in Pristina 10 kilometres (six miles) away - was believed to have been caused by gas.
"The ceiling started to fall. Before I left the plant I noticed many wounded and much blood," he said.
An AFP photographer who managed to approach the plant two hours after the explosion said its walls were severely damaged.
The windows of about a dozen cars parked nearby had shattered from the impact of the blast, as had those of houses in the vicinity.
Thick black smoke billowed from the plant as firefighters and rescuers from a special emergency unit of Kosovo Security Force made their way in and out of the building.
The European Union has described the plant as the worst single source of pollution in Kosovo. It is expected to be closed by 2017.
A worker who happened to be outside the plant at the time of the blast said: "There was a huge fire that broke out after the explosion. Panic broke out. We started to run as no-one knew what was going on."
"The explosion broke my (entrance) door and all windows of my house," said a man living nearby the plant.
Outgoing Kosovo Prime Minister Hashim Thaci came to the plant shortly after the blast.
He denied rumours that new blasts could be expected.
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