The EBRD has approved a €4 million loan to Sparkasse Bank AD Skopje to advance green energy investments in North Macedonia. This initiative will fund high-performance energy efficiency and renewable energy projects, with the goal of reducing the country’s energy consumption and carbon emissions.
Green Energy Financing Initiative
The European Bank for Reconstruction and Development (EBRD) has approved a significant financial initiative to promote green energy investments in North Macedonia. Through the Western Balkans GEFF III framework (also known as GEFF Macedonia), Sparkasse Bank AD Skopje will receive a senior unsecured loan of up to €4 million to oversee its implementation. The bank will be required to adhere to the EBRD’s Performance Requirements for 2024 and submit annual environmental and social reports.
The project’s main objective is to provide sub-loans financing various green economy transition (GET) investments. These funds will support approved green energy solutions, targeting high-performance energy efficiency technologies, materials, and systems for residential buildings, as well as renewable energy projects in the public sector. This financing is expected to significantly reduce energy consumption and carbon emissions in North Macedonia’s residential and public sectors.
Technical cooperation and grant financing from the European Union (EU) through the European Western Balkans Joint Fund (EWBJF) will support project preparation and implementation. This initiative underscores the EBRD’s commitment to sustainable development and green investments in the Western Balkans, contributing to the broader goals of the Green Economy Transition. Ultimately, the project is set to enhance energy efficiency and renewable energy adoption in North Macedonia, fostering economic development while mitigating environmental impacts.
Renewable Energy Potentials in North Macedonia
Renewable energy projects are among the most attractive opportunities for new investors. Currently, most of North Macedonia’s electricity is produced by thermal power plants that use coal as their primary energy source.
Thermal power plant.
Renewable sources account for 38% of North Macedonia’s total installed capacity, with large hydropower plants providing most of this energy. Despite the country’s vast renewable potential, especially in solar, it still depends on imported electricity, which accounts for around 30% of its gross consumption.
The government’s current Energy Development Strategy (2020-2040) calls for the complete phasing out of coal by 2027, with a target for renewables to supply 45% of total energy production by 2040. In line with these goals, North Macedonia has also joined other Western Balkan states in signing the Sofia Declaration on the Green Agenda, committing to the EU’s target of a carbon-neutral continent by 2050.
Renewable Energy Projects in North Macedonia
Over the last two years, interest in renewable energy construction has grown significantly in North Macedonia. A record number of energy licenses were issued in 2022, and the Macedonian Regulatory Commission for Energy (RKE) announced it had issued another 278 licenses in just the first six months of 2023.
If all these licensed projects become operational, they would add 270 MW of new capacity. This figure is substantial for North Macedonia, where the largest solar plant is currently just 17 MW and the second-largest is 10 MW.
According to the RKE’s 2022 Annual Report, 267 new renewable power plants are in development, with solar comprising the largest share at 254 plants. These projects are set to increase total generation capacity to 144.4 MW, of which 99.2 MW is solar. The remaining new plants include 11 small hydro-plants (7.2 MW), one wind plant (36 MW), and one biogas thermal power plant (2 MW).
The EBRD’s financial initiative, coupled with Sparkasse Bank’s oversight and EU support, represents a concerted effort to accelerate North Macedonia’s green economy transition. Sub-loans provided under this framework will facilitate the adoption of modern energy efficiency technologies and renewable solutions, helping to reduce the country’s reliance on coal and imported electricity.
