Grant agreement for the solar plant in Oslomej signed
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.
David Geer, Ambassador of the European Union in the Republic of North Macedonia: “North Macedonia is a land of sun. Hence, the construction of the 10MW solar photovoltaic project on the site of the former coal mine in Oslomej is a natural and logical step on the country’s energy transition path from fossil fuels to renewables. By using solar power to create clean energy, this project will help North Macedonia secure numerous benefits including cleaner air and greater energy security, independence and resilience. We in the EU are proud to support this country on its very important journey towards cleaner and more secure energy supplies, together with the EBRD and other development partners.”
Andi Aranitasi, EBRD Head of North Macedonia: “We are keen to continue working with North Macedonia on reducing its reliance on ageing coal-fired infrastructure. Following the successful completion of the Oslomej 1 solar pant, we are excited to see that the government is continuing with investments in solar energy, and we remain ready to provide further support if needed.”
PV Powerplant Oslomej 1, North Macedonia (c) WBIF, November 2022
Fatmir Besimi, Minister of Finance of North Macedonia: "Today's signing of the €1.6 million agreement between the ESM and the EBRD for the installation of a photovoltaic power plant in TPP Oslomej, goes in the direction of the green agenda and the energy transition. The project has been successfully set up and this contribution from the EU reduces the loan provided for the project by the EBRD. The project will use natural solar energy to generate electricity, so createing sustainable growth and development and achieveing a better quality of life for us and future generations. It is part of our European future, which does not mean just passing laws, but making real changes to living conditions. This is an act that marks the solidarity of the EU, of the values that we share with the EU countries and EU citizens, and where our country also belongs."
Vasko Stefanov, General Director of AD ESM: "The purpose of the investment grant is to provide support in financing the costs of the photovoltaic power plant, which include the purchase of equipment, construction works and works related to the installation of the equipment. The support and cooperation with EU and EBRD is of crucial importance and will contribute to a faster and easier transition to the green agenda for the Western Balkans, with the commitment to transition to clean energy, which aims to reduce greenhouse gas emissions by 60%."
The WBIF project Oslomej 1 Solar Photovoltaic Power Plant has been identified as a flagship investment in the Economic and Investment Plan for the Western Balkans and one of the major investment projects endorsed in December 2021. More about the Flagship investments 2020-2023 here.