- EBRD lends €100 million to Macedonian electricity utility JSC Elektrani na Severna Makedonija
- Emergency liquidity support to strengthen ESM’s financial resilience, and enhance energy security in North Macedonia
- ESM and the Government commit to a robust decarbonisation action plan as part of the project
The EBRD is supporting energy security in North Macedonia by lending €100 million to the country’s public electricity utility JSC Elektrani na Severna Makedonija (ESM). The EBRD’s emergency liquidity loan will help ESM to maintain its financial resilience and continue to provide its essential services. The loan proceeds will be used to finance ESM’s electricity imports and working capital needs.
Heavily dependent on energy imports, North Macedonia has suffered from rocketing energy prices, feeding into high inflation. As a consequence, the state-owned ESM has been facing a large liquidity gap. The EBRD’s loan helps to address ESM’s liquidity needs, reducing its reliance on additional government support, and enables the company’s financial turnaround to support its capital investment plan.
The project comes at a critical time in the Macedonian energy transition. The country has committed to reduce its net greenhouse gas emissions by 82 per cent by 2030, primarily by decommissioning its coal-powered thermal power plants and coal related operations. ESM, which provides approximately 90 per cent of the country’s domestic electricity generation, is a key player in this transition.
As part of the investment, ESM will implement a robust decarbonisation strategy, aligned with the Macedonian National Energy and Climate Plan (NECP), targeting clear decarbonisation commitments.
These include climate-related reporting and disclosure, investments in new renewable energy capacity by ESM, and support for the development and connection to the grid of 1,500 MW private renewable energy capacity by 2030. To enable these and further investments in renewable energy, ESM and the Macedonian government have committed and are implementing wide-ranging energy market reforms such as a stronger regulatory framework through an updated energy law, market coupling and reform to the tariff methodology.
“The Government of North Macedonia, together with ESM, are showing the way for other countries in the Western Balkans region to successfully decarbonise and modernise their energy system. We are impressed with their climate ambitions, and look forward to working together to implement the $85 million made available to North Macedonia by the Climate Investment Fund,” said Charlotte Ruhe, EBRD Managing Director for Central and South Eastern Europe.
ESM is a public electricity generation utility, fully-owned by the Government of North Macedonia, that employs 4,600 people. The company supplies the majority of domestic electricity production with installed capacity of circa 1.5 GW. It operates two thermal power plants, eight hydropower plants, two combined heat and power facilities and the first wind farm in the country.
To date, the EBRD has invested more than €2.5 billion in 175 projects in North Macedonia.