Financing agreements totaling €36.2 million were signed on 23 February 2023, for the rehabilitation of six hydropower plants in North Macedonia. The investment consists of €11.2 million in EU grants, €25 million loan from the KfW development bank, and €200,000 from the German Government – all funds channeled through the Western Balkans Investment Framework (WBIF).

The investment will be completed in the next two years and is the third phase of the rehabilitation of six large hydropower plants (HE Vrutok, HE Vrben, HE Raven, HE Tikvesh, HE Shpilje and HE Globocica) that provide between 20% and 30% of the total electricity production in the country.

The investments will extend the lifetime of the plants, increasing their generation capacity by 13.5 MW. Electricity production will increase by about 47.5 G The project is in line with the commitment of the Green Agenda for the Western Balkans to transition to clean energy and will contribute to the Energy Development Strategy of North Macedonia. This aims to reduce greenhouse gas emissions by 61% compared to 2005 levels and increase the share of renewable energy sources to 45% by 2040.

The loan, grant and guarantee agreements were signed between KfW Head of the Division for Energy and Transport Southeast Europe and Turkey, Pablo Obrador Alvarez; Minister of Finance of North Macedonia Fatmir Besimi; and Director of the public company AD ESM – Skopje Vasko Kovachevski. The signature ceremony was attended by the European Ambassador David Geer and the acting ambassador of Germany in the country, Otto Graf.

The project, identified as Flagship 4 – Renewable energy in the EU Economic and Investment Plan, is part of the European Commission´s effort to improve energy security in the region, and follows the adoption of the €1 billion Energy Support Package for the Western Balkans. It is financed through the WBIF part of the package (€500m) that covers priority flagship investments to diversify energy supplies, boost renewable energy and improve energy efficiency.