19th July 2023, Skopje – Government of the Republic of North Macedonia ensures financing in the amount of EUR 100 million as a loan under favourable terms and conditions as support to Power Plants of North Macedonia (ESM), being part of the activities undertaken to tackle the energy crisis. Yesterday, the Parliament adopted the law providing for making EBRD funds available to AD ESM.
Adoption of the Law on Guarantee by the Republic of North Macedonia for the Loan Agreement for Financing the ESM Energy Crisis Liquidity Support Project is a precondition for the signing of the Loan Agreement between EBRD and AD ESM. Under the Agreement, EUR 100 million is provided as AD ESM liquidity support.
The Loan, extended under favourable terms and conditions, is intended for supporting AD ESM’s liquidity in times of energy crisis, all to the end of continuous stable and reliable supply of electricity to the citizens and the businesses. Repayment period is 5 years, with 6-month grace period, and 6-month EURIBOR variable interest rate increased by 1% margin.
The Project complements both the measures the Government has adopted aimed at coping with the energy crisis and the financial support allocated from the State Budget, all to the end of ensuring subsidized electricity supply price for the households and undisrupted supply of electricity, hence, the Loan, extended under exceptionally favourable terms and conditions, underpins the respective activities. The Government has adopted two sets of anti-crisis measures, amounting to over EUR 760 million, with EUR 225 million being projected in 2023 Budget.
AD ESM is the borrower of the EBRD Loan and all liabilities arising therefrom will be settled by the company, with the Government issuing sovereign guarantee therefore. Once the Law is adopted, following agreements will be signed: Guarantee Agreement between North Macedonia and EBRD, Loan Agreement between AD ESM and EBRD and Separate Agreement for regulating the mutual rights and obligations between MoF and AD ESM.