FYR Macedonia

Project number:


Business sector:

Power and energy

Notice type:


Environmental category:


Approval date:

08 Jun 2004



PSD disclosed:

21 Jun 2002

Project Description

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.

Transition Impact

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.

The Client

  • 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.

EBRD Finance

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.

Project Cost

Up to €45 million.

Environmental Impact

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.

Technical Cooperation


Company Contact


Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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