North Macedonia’s utility ESM borrows EUR 100 million to solve liquidity issues

ebrd esm macedonia loan skopje

Photo: Dimitris Vetsikas from Pixabay


August 23, 2023






August 23, 2023





North Macedonia’s power utility Elektrani na Severna Makedonija has borrowed EUR 100 million to tackle liquidity issues.

The European Bank for Reconstruction and Development (EBRD) is supporting energy security in North Macedonia by lending EUR 100 million to Elektrani na Severna Makedonija (ESM), the bank said.

The emergency liquidity loan will help ESM to maintain its financial resilience and continue to provide its essential services. According to the bank, the loan will be used to finance ESM’s electricity imports and working capital needs.

According to local media, the loan repayment period is five years, with a grace period of six months and a variable interest rate at six-month Euribor plus a margin of 1%. The company is the beneficiary of the funds and the government provides a guarantee.

EBRD: The company has been facing a large liquidity gap due to large imports of energy at high prices

The bank said that the company has been facing a large liquidity gap due to large imports of energy at high prices.

The EBRD’s loan helps 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, EBRD explained.

Of note, ESM’s revenues in 2022 were MKD 34.1 billion (EUR 554 million), while expenditures reached MKD 31.6 billion (EUR 513 million). The profit was MKD 2.2 billion (EUR 36.6 million).

The bank notes that the country has committed to reducing its net greenhouse gas emissions by 82% by 2030, primarily by decommissioning its coal-powered thermal power plants and coal-related operations.

ESM’s decarbonization strategy includes climate-related reporting and disclosure

ESM’s decarbonization strategy includes climate-related reporting and disclosure, investments in new renewable energy capacity by ESM, and support for the development and connection to the grid of 1,500 MW of private renewable energy capacity by 2030, EBRD said.

Vasko Stefanov, CEO of ESM, said the loan will be used for the company’s current operations and green energy transition projects, local media reported.

Charlotte Ruhe, EBRD Managing Director for Central and South Eastern Europe, said that the Government of North Macedonia, together with ESM, is showing the way for other countries in the Western Balkans region to successfully decarbonize and modernize their energy systems.

“We are impressed with their climate ambitions, and look forward to working together to implement the USD 85 million made available to North Macedonia by the Climate Investment Fund,” Ruhe stressed.

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