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EBRD to acquire stake in FYR Macedonian power utility
Investment to support privatisation of ESM
The EBRD is providing up to €45 million to help promote the privatisation of
Elektrostopanstvo na Makedonija (ESM), the state-owned power utility in FYR
Macedonia.
The Bank’s investment will support the intention of the government to make the
necessary restructuring plans and reforms to enable ESM’s sale to a strategic
investor. The financing will be disbursed in seven instalments, each
associated with key conditions to be met by the government. These include the
appointment of an experienced advisor to structure the privatisation process,
the implementation of necessary regulatory reform in the energy sector, and
the observance of the appropriate steps to ensure an open, competitive and
transparent privatisation process. The Bank is expected to receive company
shares once ESM is privatised.
Anthony Marsh, Director for Power and Energy at the EBRD, said the project
fits well with the government’s ongoing power-sector reform, which is seeking
to meet its commitments for the regionalisation of the Southeastern Europe
energy markets and to attract fresh investment in the sector. Having specific
targets conditioned to the project will help ensure the privatisation is fair
and transparent, and will help the company become an attractive opportunity
for the international investment community. The project is also important for
FYR Macedonia because the eventual privatisation will bring with it
much-needed gains in efficiency to the sector and investment to the country,
Mr Marsh added.
With its headquarters in Skopje and 37 subsidiaries across most cities in FYR
Macedonia, ESM’s main operations include the production, transmission and
distribution of electricity across the country.
This project builds on previous cooperation between the EBRD and ESM. Late
last year the Bank lent the utility €40.5 million to help build a 150 km
transmission line crossing into neighbouring Bulgaria, while an earlier €17.3
million loan helped fund a new transmission line within FYR Macedonia.
The EBRD is the largest investor in FYR Macedonia, having provided more than
€370 million in 24 projects. Working with its many partners, including the
private sector, it has mobilised more than €440 million for projects across
the country. In the energy sector alone the Bank has committed around €123
million.
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