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HomeFinanceEBRD lends 100 mln euros to North Macedonian ESM

EBRD lends 100 mln euros to North Macedonian ESM

The European Bank for Recovery and Development (EBRD) has announced a 100 million euro liquidity loan for North Macedonian state-owned power company Elektrani na Severna Makedonija – ESM (22 August).

The loan will aid ESM in maintaining its financial resilience and continue to provide essential services. The loan proceeds will be used to finance ESM’s electricity imports and working capital needs, the EBRD said in a press release.

Heavily dependent on energy imports, North Macedonia has faced a surge in energy prices since the start of the energy crisis last year, feeding into high inflation. As a consequence, ESM has been facing a large liquidity gap. The EBRD’s loan aims 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 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 dollars made available to North Macedonia by the Climate Investment Fund,” said Charlotte Ruhe, EBRD Managing Director for Central and South Eastern Europe.

North Macedonia 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 provides around 90 per cent of the country’s domestic electricity generation.

The state-owned power company plans to implement a robust decarbonisation strategy, aligned with the Macedonian National Energy and Climate Plan (NECP). This includes climate-related reporting and disclosure, investments in new renewable energy capacity 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 renewables, 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.

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