EBRD Provides €37M Loan To North Macedonia’s ESM For 134 MW Bitola 3 Solar Plant With KfW’s €50M Support

The European Bank for Reconstruction and Development (EBRD) is providing a sovereign-guaranteed loan of up to €37 million to Elektrani na Severna Makedonija (ESM), North Macedonia’s state-owned electricity generation company. The loan will support the development, construction, and operation of a 134 MWdc solar power plant on the site of a former coal mine in Bitola. This financing comes alongside a €50 million sovereign-guaranteed loan from the German development bank KfW. This marks the first time that EBRD and KfW are jointly financing and implementing a project, demonstrating strengthened cooperation between the two development institutions.

The Bitola 3 Solar Power Plant is a central project under North Macedonia’s Just Energy Transition Investment Platform (JETIP), which was launched at COP28 in 2023 with significant technical leadership from the EBRD. JETIP aims to mobilize up to €3 billion in investments while providing technical and policy support to deploy 1.7 GW of new renewable energy capacity by 2030. The platform is specifically designed to support coal-dependent communities and ensure that the transition to renewable energy is socially inclusive and just.

Once operational, Bitola 3 is expected to produce 180.9 GWh of renewable electricity annually and reduce carbon dioxide emissions by around 134,000 tonnes each year. The project contributes directly to North Macedonia’s goal of phasing out coal and achieving an 82 percent reduction in greenhouse gas emissions by 2030, as outlined in the country’s National Energy and Climate Plan and updated Nationally Determined Contributions. The project will expand solar power generation, strengthen domestic electricity production, reduce reliance on energy imports, and promote a cleaner and more resilient energy system.

Beyond its environmental benefits, the project will also support improvements in ESM’s corporate governance. It will provide training for employees, strengthen anti-corruption policies, and support the development of the company’s internal compliance function. These initiatives aim to enhance overall governance standards and ensure that the company operates with greater transparency and accountability. The project will also focus on promoting gender inclusion. It will enable ESM to participate in the Women-Led Coal Transition platform, which emphasizes community engagement, capacity building, and climate leadership. This initiative is designed to ensure that women are actively involved and have equitable opportunities in the country’s energy transition.

EBRD and KfW will implement the project together under a Project Implementation Agreement that establishes a clear framework for collaboration. This partnership highlights the strategic cooperation between the two institutions in the Western Balkans, aiming to accelerate the region’s transition to a green economy. The Bitola 3 Solar Power Plant represents a significant milestone in North Macedonia’s energy transition and aligns with EBRD’s broader strategies, including its North Macedonia Country Strategy, Energy Sector Strategy, Green Economy Transition approach, and Equality of Opportunity Strategy.

Fatih Türkmenoğlu, Head of North Macedonia at EBRD, noted that the investment marks a turning point for the country’s energy sector. He emphasized that by converting legacy coal infrastructure into renewable energy, the project supports North Macedonia’s climate objectives while ensuring that the transition to a green economy is fair, inclusive, and sustainable. Moritz Remé, Director for Kosovo and North Macedonia at KfW, highlighted that partnerships like this allow for greater impact and contribute to a sustainable and resilient energy future.

Lazo Uzunčev, General Manager of ESM, stated that the company’s renewable energy projects are progressing rapidly. He mentioned that bids are being opened for photovoltaic plants Oslomej 2 and Bitola 1, while work on the second phase of the Bogdanci wind park is already underway. Including Bitola 3, these projects will increase North Macedonia’s domestic renewable energy capacity by more than 200 MW over the next two to three years. This expansion not only improves energy security but also significantly reduces carbon emissions, by more than 260,000 tonnes annually. The EBRD has been a major institutional investor in North Macedonia, committing over €3 billion to more than 200 projects across the country, supporting economic development, infrastructure, and the transition to a green economy.