UPDATE: North Macedonia prepares first agreements with strategic investors for solar power plants, cogeneration

North Macedonia prepares first agreement with strategic investor for solar power plant pehcevo

Photo: solar energy from Pixabay


February 5, 2024






February 5, 2024





North Macedonia has drafted the first laws and agreements on strategic investments in the energy sector, a model the country is using to facilitate and speed up investments in renewable electricity plants. The first four projects are solar power plants Pehčevo and Stipion, cogeneration facility Skopje, and a photovoltaic plant with gas engines.

In 2020, North Macedonia passed the Law on Strategic Investments to encourage, attract, and create conditions for the implementation of strategic investments. Under the procedure, the government first decides to grant the status to a project. So far there are 12 on the list, of which the vast majority is for renewables. They include Green Energy Factory, Mytilineos’ proposed cogeneration facility in Skopje, Stipion, Erdželija, Pehčevo and Virovi.

Next, the government negotiates with the investor, aiming to produce an agreement and a law, which then need to be approved by the parliament. The government’s first decisions to grant the strategic investor status were adopted back in 2021, but it took a while to negotiate the agreements and draft the laws.

Mytilineos will get EUR 50 million in state aid

Now, the government has adopted bills on the four investments and sent them to lawmakers. An integral part of the proposals are the strategic investment project agreements between the government and four firms – with HEC Solar MK for Pehčevo, with Ostro Solar for Stipion, with Mytilineos Heat and Power for the Skopje cogeneration project, and with AIM Green Tech for the photovoltaic plant with gas engines.

According to the company’s website, HEC Solar MK was founded by Bulgaria-based HEC Solar, established by Vladimir Tabutov, while the CEO is Bojan Tabutov.

The owner of Ostro Solar is French energy company Akuo Energy, while Mytilineos Heat and Power was established by Mytilineos from Greece.

The adoption of the bills for the three solar facilities, and therefore the implementation of these projects, will not require funds from the budget. This is not the case with the cogeneration project, which will receive state aid of EUR 49.75 million.

Total investments estimated at EUR 786 million

The capacity of the Pehčevo and Stipion solar power plants will be 73 MWac, and 400 MW, respectively. The planned capacity for the cogeneration facility is 130-165 MW for electricity and 90-105 MW for heat.

The AIM Green Tech project envisages two phases. The first phase would involve a mix of 150 MW of photovoltaic panels and 25 MW of gas engines, while the second phase would be an investment in an expandable 25 MW gas-fueled emergency power plant. Both phases include potential installation of battery systems, according to the documents.

The funding is to be provided by investors

The investor plans to invest almost EUR 52 million in PV plant Pehčevo, while the investment in the Stipion solar project is estimated at EUR 270 million. The construction of a facility for the combined production of electricity and heat envisages a EUR 290 million investment, and the mix of solar and natural gas EUR 174 million.

Strategic investors are obliged to secure financing from commercial and development banks, international financial institutions, and international funds.

The investors in solar are required to pay the state EUR 1 per MWh of electricity sold

All projects would be located on state land, which the investor would lease. The investors in Pehčevo and Stipion can install agrisolar systems, while this is not envisaged for the third solar project.

Every six months from the start of the commercial operation of the photovoltaic plants, and until decommissioning, the investor is obligated to pay, to the Development Fund set up by the Development Bank of North Macedonia, EUR 1 per MWh for all electricity that it sells.

PPAs with ESM

The investors will sign a power purchase agreement (PPA) with state-owned power utility Elektrani na Severna Makedonija (ESM), the deal stipulates. In the case of Mytilineos, it will be a power and heat purchase agreement.

The price is mentioned only in the bill for Stipion – EUR 56 per MWh.

Тhe agreement between the government and the investor for Pehčevo would be valid for 25 years, and for the remaining three projects, 30 years.

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