The European Union and WBIF bilateral donors, together with the European Bank for Reconstruction and Development (EBRD), are consolidating their support for solar energy projects in North Macedonia with grant financing for the first large-scale solar plant. A WBIF bilateral donor grant agreement of €1.6 million was signed on 30 June 2023 in Skopje, complementing an EBRD loan of €5.9 million. The grant will support Elektrani na Severna Makedonija (ESM), the country’s state-owned electricity company, in financing the final construction stages of a 10 MW solar plant being built on the site of the exhausted coal mine in Oslomej. Test operations began in April last year.

The photovoltaic power plant, built in the vicinity of the thermal powerplant Oslomej, is the first example of energy transition in Southeast Europe, where electricity will be produced from the sun through panels placed on top of the old and exhausted coal mine. It is the first in a series of power plants that should completely replace the installed capacity of the thermal power plant. The new photovoltaic power plant Oslomej is expected to have an annual production of 15-17 gigawatt-hours of electricity, to emit 13,000 tons of CO2 emissions per year and to provide the electricity needs of about 2,800 households.

As well as providing financing, EBRD is working with the authorities of North Macedonia to address the implications of inequality in the energy transition and to identify opportunities for economic diversification in the area, including for redeployment and reskilling. The EBRD is helping the country conduct a ‘just transition’ diagnostic and establish an action plan through inclusive policy dialogue with the authorities. The ‘just transition’ project is expected to act as a model for the wider Western Balkans region, which faces similar challenges and requires a green, inclusive and just transition in the energy sector.