ESM PRE-PRIVATISATION SHARE PURCHASE
Power and energy
08 Jun 2004
21 Jun 2002
Proposed purchase of shares by the EBRD in the state-owned vertically integrated power utility Elektrostopanstvo (ESM) or successor companies established following the restructuring of ESM (each a sub-ESM). This would support restructuring and privatisation of ESM and related regulatory reform. The project would encourage privatisation of ESM, or sub-ESMs, to long-term qualified strategic investors through a well conceived, transparent, competitive privatisation process, supported by relevant regulatory reform consistent with EU Directives.
The transition impact of the loan derives from the following:
The Project promotes a transparent and fair privatisation process and seeks to attract an investor(s) qualified in state-of-the-art standards of operation.
The Project supports long-term reform measures consistent with harmonising with EU energy directives and the Athens Memorandum of Understanding for the creation of a regional energy market in Southeast Euorpe. This includes the development of a regulatory structure based on transparent operations pursuant to objective criteria for efficient operations, independent regulation, competitive elements where they can be introduced, and the implementation of a cost recovery tariff methodology in line with best international practice.
The Bank’s long term involvement in post-privatisation will ensure good corporate governance and promote good communications between the strategic investor(s) and local authorities.
ESM, Electric Power Company of FYR Macedonia, the state-owned, vertically integrated electricity utility
Government of Former Yugoslav Republic of Macedonia (GOM) represented by the Ministry of Finance (MinFin) and Ministry of Economy (MinEcon)
Strategic Investor(s): winner(s) of the tender process for the privatisation of ESM.
Purchase from FYR Macedonia of shares up to €45 million either in a) ESM or b) any successor entity or entities resulting from the unbundling of ESM into separate companies (each, a sub-ESM). Such purchase would be completed on its terms at privatisation of ESM or any sub-ESM. The payment for such shares would be made in advance of privatisation subject to the Government meeting milestones in the privatisation process, as agreed with the Bank.
Up to €45 million.
The project has been screened C/1. It involves existing facilities that need to undergo an Environmental Audit. The audit will address all activities of the company, ranging from power generation to transmission/distribution to define the environmental baseline for privatisation purposes. The audit results will also be used to develop an Environmental Action Plan (EAP), which will provide a road map ESM for meeting Macedonian and EU environmental, health and safety standards within a reasonable timeframe.
This section will be updated after completion of the environmental due diligence.
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