The EBRD has approved a €4 million loan to Sparkasse Bank AD Skopje to promote green energy investments in North Macedonia. This initiative aims to fund high-performance energy efficiency and renewable energy projects, reducing energy consumption and carbon emissions in the country.
Green Energy Financing Initiative
The European Bank for Reconstruction and Development (EBRD) has approved a significant financial initiative aimed at promoting green energy investments in North Macedonia. Sparkasse Bank AD Skopje will receive a senior unsecured loan of up to €4 million under the Western Balkans GEFF III RE power residential framework and oversee the implementation of the loan. The bank is required to adhere to the EBRD’s Performance Requirements and submit annual environmental and social reports.
The primary objective of the project is to provide sub-loans that will finance various green economy transition (GET) investments. These investments include high-performance energy efficiency technologies, materials, and solutions for residential buildings; as well as renewable energy projects in the public sector. The 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 promoting sustainable development and green investments in the Western Balkans region, contributing to the overall goals of the Green Economy Transition.
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 popular opportunities for new investors. At the moment, most of the electricity in North Macedonia is produced from thermal power plants with coal as the primary energy source.
Thermal power plant.
The share of renewable energy sources in the total installed capacity in North Macedonia is 38%, with most of the renewable energy coming from large hydropower plants. Although North Macedonia’s renewable energy potential is huge, especially solar, the country is still dependent on importing electricity. Imported electricity constitutes around 30% of the overall gross consumption.
The current Government’s Energy Development Strategy 2020-2040 envisages total phasing out of coal by 2027, with 45% of total energy production to come from renewable sources by 2040. Along with other Western Balkans states, North Macedonia has signed the Sofia Declaration on the Green Agenda, which commits to pursue the target of a carbon-neutral continent by 2050, along with the rest of the EU.
Renewable Energy Projects in North Macedonia
There has been significant interest in the construction of renewable energy projects in North Macedonia over the last two years. In 2022, there was a record high number of issued energy licenses. Additionally, the Macedonian Regulatory Commission for Energy (RKE) has already announced that it issued 278 licenses in just six months of 2023.
If all the issued energy licenses result in operational power plants, that would amount to 270 MW of newly installed capacity. This is a huge number for North Macedonia, as the biggest solar plant at the moment is only 17 MW, with the second biggest being 10 MW. According to the RKE 2022 Annual Report, 267 new renewable energy power plants are currently in the works, with solar plants making up the largest share at 254 plants.
This has resulted in the total producing capacity increasing to 144.4 MW, out of which 99.2 MW is solar. The rest of the new energy power plants are 11 small hydro-plants, with an installed capacity of 7.2 MW, one wind plant, with an installed capacity of 36 MW, and one biogas thermal power plant, with an installed capacity of 2 MW.
The EBRD’s financial initiative, in conjunction with Sparkasse Bank AD Skopje’s oversight and the support from the EU through the EWBJF, represents a concerted effort to accelerate North Macedonia’s transition to a greener economy. The sub-loans provided under this framework will enable the adoption of cutting-edge energy efficiency technologies and renewable energy solutions, helping to reduce the country's reliance on coal and imported electricity.