EIB to finance North Macedonia’s gas interconnector with Greece

The European Investment Bank (EIB) is providing a EUR 28.9 million loan for building North Macedonia’s section of a natural gas interconnector with Greece, which will help the Balkan country diversify its gas supply, enhance energy security, and increase the competitiveness of its energy market for the benefit of consumers. The project is seen as a short-term measure aimed at facilitating a gradual shift to clean energy, with natural gas as a transition fuel.

The construction of the 68 km gas interconnector section will link the country to the increasingly diversified natural gas markets in Greece and help integrate North Macedonia into the regional and EU energy market, the bank said in a press release.

Minister of Finance of North Macedonia Fatmir Besimi said the project will provide stability in the energy supply, above all in the field of industry.

North Macedonia is already working on switching to gas as a transition fuel

North Macedonia already has plans to convert two fossil-fuel power plants into gas-fired facilities. The thermal power plants slated for conversion are oil-fired TEC Negotino and the coal-fired first unit at REK Bitola.

The country is in talks with General Electric Investment on building a gas-fired power plant in the southwestern city of Bitola. Also as part of a plan to phaseout coal, North Macedonia has signed memoranda with Greece on the supply of natural gas and electricity produced the neighboring country’s future gas-fired power plant, with the aim of abandoning coal.

The North Macedonia-Greece gas interconnector will help the Western Balkan region gradually move away from coal

The North Macedonia-Greece gas interconnector project will help the entire region gradually move away from coal, while increasing connectivity and creating the conditions for a common regional market and attracting new investments, said Lilyana Pavlova, the EIB Vice-President responsible for the Western Balkans.

It is also linked to the EIB’s earlier commitment to enhance energy security in the Western Balkans, according to her.

The project is a flagship investment under the Economic and Investment Plan for the Western Balkans

The investment has been classified as a project of mutual interest by the Energy Community, and is one of the flagship investments under the European Commission’s Economic and Investment Plan for the Western Balkans.

The EIB loan to North Macedonia complements a EUR 12.4 million grant by the Western Balkans Investment Framework (WBIF) for technical assistance and project implementation, according to the press release.

Investment in gas in North Macedonia is a transitory measure to help shift to renewable energy

“Investing in natural gas in North Macedonia has to be seen as a transitory measure to enable a gradual shift to renewable, green and clean energy, improving environmental health and ensuring energy security in the long run,” said Steffen Hudolin, Head of Cooperation in the EU Delegation to North Macedonia.

Since the start of the COVID-19 pandemic, the EIB has invested EUR 144 million in North Macedonia to support the faster recovery of small and medium enterprises and the development of vital infrastructure, the bank said.