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The EBRD is providing up to €
45mn 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, says 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, Marsh adds.

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 €
40.5mn to help build a 150km transmission line crossing into neighbouring Bulgaria, while an earlier €
17.3mn loan helped fund a new transmission line within FYR Macedonia.
The EBRD is the largest investor in FYR Macedonia, having provided more than €
370mn in 24 projects. Working with its many partners, including the private sector, it has mobilised more than €
440mn for projects across the country. In the energy sector alone the bank has committed around €