The project consists of: (a) construction of a 150 km long 400 kV Transmission line from Stip, FYR Macedonia to Chervena Mogila, Bulgaria (80 km of the line is to be built in Bulgaria); (b) upgrades to substations in Dubrovo; and (c) a new substation in Stip. The project will: (a) increase system stability, particularly in the east of the country; (b) decrease system losses; and (c) help the establishment of a regional electricity market.
In the domestic context, the transition challenge is to improve sector performance vis-à-vis losses and operations, and promote unbundling and commercialisation in a sector still organised along the lines of a state owned integrated utility. The Project will support long-term reform measures, including independent regulation and an improved tariff formulation for cost recovery. In the regional context, the Project will support market expansion, leading to efficiency gains and, in the long run, increased competition, by linking up the power networks of FYR Macedonia and Bulgaria and creating greater opportunities for trade by other countries in the region as well. The agreements between FYR Macedonia and Bulgaria required for the Project will set a precedent for other similar projects and thus may speed the creation of a regional electricity market to which the region’s countries have committed themselves.
The client is the state-owned electricity utility – Elektrostopanstvo na Makedonija (ESM). The public enterprise ESM has existed for more than five decades in various legal forms. Recently its legal status was converted to joint stock company. Its basic activities are the production, transmission and distribution of electricity in FYR Macedonia. ESM also operates coal mines associated with thermal power plants, and is involved in regional electricity trade.
Up to €41 million sovereign-guaranteed loan.
The project was screened A 0, requiring separate Environmental Impact Assessments (EIAs) for both the Bulgarian and the Macedonian part of the transmission line. EIAs, prepared by local consultants in accordance with national permitting requirements, were reviewed by the Bank and independent international consultants and were subsequently amended to comply with Bank requirements. The EIAs confirmed the adequacy of the route selection process and did not identify major environmental issues. The routing of the line is not affecting protected areas and the transmission corridor is at a sufficient distance to avoid negative impacts on local population. The EIAs include sets of recommendations to alleviate any impact during construction and operation.
As part of the EIA process, a scoping meeting was held in Stip, for the Macedonian part of the line. The Bulgarian EIA process (as required under national law, which is based on EU requirements) had already included public meetings and it was therefore decided that a scoping meeting was not required. The draft final international EIA documents were made publicly available as required under the Bank’s policies, in both the national languages and in English. A public meeting was held for the Macedonian part of the transmission line in Kriva Palanka. NGOs from both countries were invited to this meeting. The public consultation process inclusive of this meeting did not raise any substantial points. The meeting raised a number of comparatively minor points which were subsequently considered in the final version of the Macedonian EIA. With regard to the Bulgarian EIA, there was no public interest in the documents and it was therefore decided that a public meeting waas not necessary. This absence of interest reflects the fact that a full consultation process had already been carried out under the national EIA law and that NGOs from both countries attended the two meetings in Macedonia. The recommendations set out in both EIAs are covenanted (as an Environmental Action Plan) in the Loan Agreement and their implementation will be monitored by the Bank.
Up to €50,000 to confirm project costs and prepare a Project Implementation Plan (PIP), funded by Switzerland.
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Text of the PIP