The European Investment Bank (EIB), the European Union's long-term lending institution, is providing a loan of EUR 13 million to Electrostopanstvo na Makedonija (ESM), the state-owned, vertically integrated national electricity utility. The loan will go to the rehabilitation and modernisation of various power substations and lines, in and around the capital Skopje and in the west of Macedonia.
The investment aims to maintain and improve quality and reliability of power supply, to reduce maintenance costs and to lower technical losses. It is co-financed with the European Agency for Reconstruction (EAR), who has indicated an interest in providing grant financing for the technical assistance required for project implementation.
This first EIB loan for the energy sector in FYROM represents a diversification of the Banks operations in terms of sector and client involvement in FYROM, where the EIB until now has mainly been supporting the transportation sector with loans totalling EUR 130 million for two priority road schemes and a loan of EUR 20 million for small and medium enterprises (SMEs).
By the end of 2003, the European Investment Bank will have committed a total of EUR 359 million in loans to the Western Balkans
EIB will in the coming years remain an important source of finance for the Western Balkans Countries, in cooperation with the European Commission, the European Agency for Reconstruction, and other international donors, including the World Bank and EBRD. Plans for 2004 foresee EIB maintaining the annual lending level of some EUR 400 million.
As mentioned in EIB Medium Term Strategy for Western Balkans published recently three new sectors will also increasingly receive the EIB support in the coming years: Private sector (including foreign direct investment), health and human capital resources, including innovation and R&D, as well as environment (EIB is finalising significant rehabilitation investments in infrastructure related to streets, communications and utilities in the individual cities and municipalities in the region).