ESM AD Elektrostopanstvo na Makedonija

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In April 2006, The Macedonian government finalized the sale of a 90% stake in ESM AD Elektrostopanstvo na Makedonija to Austrian EVN. ESM supplied energy to the entire Republic of Macedonia, which comprised an area of approximately 25,700 km². Around two million people lived in the area covered by ESM, of whom 600,000 reside in the capital city of Skopje and also owned 11 mini- and small hydro power plants with a total capacity of 35 MW. ESM serves approximately 700,000 customers. Its customers were found in urban areas such as Skopje, Kumanovo (104,000 inhabitants), Bitola (90,000 inhabitants), Prilep (74,000) and Tetovo (72,000). The government sold the stake in ESM through a competitive tender process announced in December 2005. The tender took place in March 2006 and four bidders were qualified to submit final bids (Czech CEZ, Italian ENEL, German RWE, and Austrian EVN), but three (CEZ, ENEL, and EVN AG) did so. EVN won the tender by offering US$274 million (225 million Euro) for the 90% stake and pledged to invest US$117 million (96 million Euro) in ESM during the first three years of ownership. Calculated in years, EVN commited to invest 35.5 million Euros in the first year, 31.5 million Euros in the second year, and 29 million euros in the third year. The second-ranked company at the tender was the Czech electric power company CEZ, which offered 181.5 million euros and investments of 62.72 million euros, while third was Italian ENEL with 40 million euros and investments worth 80.22 million euros. On May 8, 2009, EVN initiated international arbitration proceedings against the Republic of Macedonia in accordance with the “Treaty Between the Republic of Austria and the Republic of Macedonia on the Promotion and Protection of Investments” as well as the “Energy Charter”. The government claimed that EVN Macedonia must pay a EUR93 million debt for unpaid electricity supplies that accrued prior to privatization (1995–2005). The court of first instance ordered EVN Macedonia to pay this amount. Subsequently, EVN Macedonia filed an appeal on May 13, 2009. The appellate court annulled the original verdict on October 1, 2009 due to procedural shortcomings. The court case is scheduled to continue in February 2010. In July 2011, ICSID recorded a settlement agreement that the parties involved in dispute signed in June 2011