19th May 2025, Skopje – New investment cycle, underpinned by the strategic partnership with the United Kingdom, introduces project financing to our country, enabling project implementation to proceed in line with the practices across other European countries, Minister of Finance, Gordana Dimitrieska-Kochoska, said at her “360 Stepeni” TV Show guest appearance.
“New investment cycle is, in essence, a project financing, signaling that we are finally acting as a European country. In particular, there is a specific project or investment with a set implementation timeframe, during which no repayments are due. This is the grace period, after which the repayment period commences. The feasibility study will define the length of the repayment period and provide an estimate of the expected revenues from the project”, the Minster of Finance said.
The Government, as she pointed out, is not pursuing an overly optimistic scenario of deploying all 6 billion euros at once, as this requires mature projects that are ready for implementation. At present, the projects involve railway infrastructure and healthcare sector.
She explained that the sources of financing will be blended, with portion of the funds to be sourced from the British Government and disbursed gradually, as per the projects progress.
“No advance payments will be made. The first invoice will be due for payment in 2027. Funds will be disbursed gradually as the projects advance. Over five years, which is the duration of one cycle, funds will be disbursed in accordance with the pace of implementation, with the repayments scheduled accordingly. This approach was initially outlined, specifying a grace period, an implementation period and a repayment period”, the Minister pointed out.
As she emphasized, this type of financing is different from issuing eurobonds.
“Issuing eurobonds is not the same as a project financing. For large-scale projects that will generate added value for future generations, the cost should to be shared with them. You cannot shoulder the entire burden alone. For instance, in 2023, the largest transfer of funds to Bechtel and Enka for Corridors 8 and 10d Motorway Project amounted to Denar 14.5 billion, i.e. EUR 230 million. The very same year, Eurobond was issued for financing this project, with an interest rate of 7%. Is that reasonable? We believe project financing is the better approach, offering a lower interest rate than 7% and allowing us to invest initially without making immediate payments or repayments”, Dimitrieska-Kochoska explained.
As per the impact on public debt, she noted that investment is typically accompanied by GDP growth.
“We cannot have borrowing in prospect, without pick up in GDP growth, that would lead to imbalanced ratio or rising public debt. This may have been the case in the past, when funds were spent unproductively and various transfers were made to certain public enterprises and joint stock companies”, the Minister said.
As she underlined, the first cycle of the project financing will span about 5 years, totaling between EUR 2 to EUR 2.2 billion, or around EUR 400 million annually. This amount will not only affect public debt, but also drive economic growth, as Macedonian companies will be engaged in the project implementation.
Moreover, some of the projects to be financed in the first cycle, particularly those in the healthcare sector, have already been budgeted and, therefore, their implementation will have no effect on the public debt.
With respect to the specific terms, negotiations are still ongoing and will be disclosed once the Memorandum of Understanding is signed. The entire process will be transparent, foster competitiveness and fully adhere to the Public Procurement Law.
