North Macedonia is preparing an investment plan for a coal phaseout by 2030, grid strengthening, new capacities and the just transition of its two coal regions. It signed a joint declaration at COP28 with international financing institutions and development banks on an investment platform worth EUR 3 billion, of which most are planned to be mobilized from the private sector.
Minister of Economy Kreshnik Bekteshi presented the Just Transition Investment Platform for North Macedonia in Dubai, on the sidelines of the United Nations Climate Change Conference – COP28. The goal is to completely phase out coal-fired power and deploy 1.7 GW of renewable energy capacity by 2030 alongside electricity grid and storage investments for energy security and just transition measures to support communities affected by decarbonization, he stressed.
The European Bank for Reconstruction and Development participated in the development of the platform. It is one of the signatories of the joint declaration with the Government of North Macedonia, European Commission, Climate Investment Funds, World Bank, International Finance Corp., European Investment Bank, Germany’s KfW Development Bank, Council of Europe Development Bank and Italian development finance institution Cassa Depositi e Prestiti.
The document is envisaged as a basis for investments, policy development and technical assistance, bringing together the Balkan country’s authorities, international financial institutions and the private sector, but also donors.
Government to remove investment barriers
Total necessary investments by 2030 are estimated at EUR 3 billion, to be mobilized by private and multilateral development banks and supplemented by budget funds to achieve the climate goals, Bekteshi explained. Donors and philanthropists are ready to support energy transition and fair transition measures, storage projects and grid strengthening and capacity building with EUR 285 million in the form of grants and concessional financing, he revealed.
The minister added EUR 2 billion is expected to be mobilized from the private sector through the removal of investment barriers, primarily for investments in renewables.
Climate Investment Funds is preparing USD 85 million in grants and concessional finance for the coal regions in North Macedonia
Renewable energy auctions will be a particularly important component, according to the EBRD. It added that the Climate Investment Funds, headquartered in Washington, DC, is considering approving up to USD 85 million in grants and concessional finance for the coal regions in February, after North Macedonia submits an investment plan.
The government is preparing it in cooperation with the EBRD, World Bank and IFC, Bekteshi asserted. North Macedonia aims to reduce greenhouse gas emissions by 82% by 2030 from the 1990 baseline, he added. It has the ambition to reach a 38% share of renewables in final gross electricity consumption by 2040, compared to 23% in 2020, the minister noted.
Climate finance model for Western Balkans but also beyond
“Assistance for workers and communities impacted by the coal phaseout, providing them access to new high-quality green jobs and localized solutions are one of our main priorities during this process,” he stated. The government adopted the Just Transition Roadmap in June and established a structure to lead the process, Bekteshi said at the event.
“We believe this is a model of how climate finance can be scaled up, in North Macedonia, the Western Balkans, and beyond, and we look forward to working closely with the government to support the delivery of these high ambitions,” EBRD’s President Odile Renaud-Basso underscored.
North Macedonia has two coal hubs with mines and power plants – REK Bitola and REK Oslomej, both run by state-owned electricity producer Elektrani na Severna Makedonija (ESM). The country made the biggest progress in the Western Balkans in replacing coal facilities with renewables.