Hydro Development in Macedonia Financed by EBRD Loan

A EUR 6 million loan has been approved for the Mali Hidro Elektrani d.o.o. (MHE) by the European Bank for Reconstruction and Development (EBRD). The loan is for developing seven small hydropower plants in Macedonia.

MHE is a local renewable energy company. The power plants would be built on seven different rivers all over the country and will have a 5.83 MW total generation capacity. On average they would produce around 21,630 MWh of electricity annually.

These generating facilities would be linked to the Macedonian Distribution Grid. MHE has signed a preferential Power purchase agreement with the Macedonian Transmission System Operator and this would be beneficial for the company as a special tariff has been instituted for renewable energy projects. This financial investment would be the first private sector investment for energy generation for EBRD in FYR Macedonia. The finance is arranged via the Western Balkans Sustainable Energy Direct Funding Facility. Once the project is completed, the project would reduce CO₂ emissions by almost 14,000 tons every year.

The funding also includes a contribution from the Norwegian Government, EBRD’s Shareholders Special Fund along with Western Balkans Fund’s Technical Assistance Funds. On the successful completion of the project, MHE would be eligible for receiving an incentive payment from EBRD, Western Balkans Funds and the European Union, for reducing the CO₂ emissions. According to Elena Urumovska, EBRD Skopje Resident Office Head, the company was delighted to support MHE with funds for a project of this importance. This project would show how small scale renewable energy projects could also be commercially viable and at the same time cater to the increasing energy requirements in FYR Macedonia.

Todor Angjushev, MHE’s General Manager, stated that MHE was a special purpose company that had been established by the joint efforts of two successful domestic companies, ADGRANIT Skopje and Feroinvest Veles. Both of them already had a vast experience in investing in small hydro power facilities. They were happy to work in tandem with EBRD for implementing this project.