By Vanora Bennett
North Macedonia has launched a just energy transition investment platform to guide its far-reaching plans for a low-carbon and just transition of the electricity sector. The platform represents a milestone for the historically coal-dependent country and highlights its ambition to Transform its energy sector and economy to a low-carbon, low-cost and secure paradigm.
The EBRD has been supporting the government in the development of the platform and will lead coordination with international partners.
The launch event at COP28, the climate summit in Dubai, was joined by the European Commission, Climate Investment Funds, the World Bank, International Finance Corporation, European Investment Bank, Kreditanstalt für Wiederaufbau, Council of Europe Development Bank as well as Cassa Depositi e Prestiti, who confirmed their support for North Macedonia’s ambition and the platform’s delivery, along with donor and philanthropic organisations.
At the event, the Minister of Economy of North Macedonia, Kreshnik Bekteshi, set out the aims of the platform, a vehicle for investment and policy development bringing together government, international finance and the private sector. It will target the complete phase-out of coal-fired power, the deployment of 1.7 gigawatts of renewable energy by 2030, grid and storage investments for energy security and just transition measures to support communities affected by this transition.
This will reinforce North Macedonia’s existing commitment, as set out in its Nationally Determined Contribution, of reducing its net greenhouse gas emissions by 82 per cent by 2030 compared to 1990 levels. Because the electricity sector is so prominent in the country’s emissions profile, with coal historically accounting for over 40 per cent of generation, the energy transition is key to achieving this goal.
The green economy transition will bring net economic benefits, supporting North Macedonia in entering green value chains and increasing the competitiveness of its economy. However, coal-reliant regions may be impacted unevenly. To address this, the platform will support regional economic diversification and human capital development in line with its Just Transition Roadmap, supported by the European Union and EBRD.
Achieving the country’s vision will require substantial investments in the country, estimated at about €3 billion by 2030. These are expected to be mobilised primarily through the private sector by unlocking market barriers, in particular for renewable energy deployment via competitive auctions.
The platform will build on a successful collaboration with the Climate Investment Fund, which is considering providing up to US$ 85 million of grants and concessional finance for the coal affected regions, subject to its Trust Fund Committee’s approval of the Accelerated Coal Transition investment plan in February.
“Central to this collaboration is support for just transition emphasising the commitment to a transition that is not only economically viable but also socially just and inclusive, and incorporating mechanisms to address potential social and economic disparities resulting from the transition. Assistance for workers and communities impacted by the coal phase out, providing them access to new high-quality green jobs and provide localised solutions are one of our main priorities during this process,” said Minister Bekteshi, who launched the programme side by side with EBRD President Odile Renaud-Basso.
“We are very proud to be a partner of North Macedonia in this innovative country-led platform, which blends government commitment, international support and private finance to accelerate a just energy transition,” said the EBRD’s President Renaud-Basso.
“We believe this is a model of how climate finance can be scaled up, in North Macedonia, the Western Balkans, and beyond, and we look forward to working closely with the government to support the delivery of these high ambitions.”
The EBRD, a leader in climate finance whose modus operandi is to work systemically with countries to create an investment climate attractive to the private sector, is putting its long experience at the disposal of North Macedonia to support the forging of IFI and donor partnerships for this platform.
In doing so, EBRD intends to leverage its experience from its just transition initiative and its support for the energy pillar of Egypt’s Nexus for Food, Water and Energy (NWFE), which was launched last year at COP27 in Egypt and is already delivering significant investments with 1.8 gigawatts of wind and solar capacity signed in the past year.