EVN Macedonia

completed

Previously known as Elektrostopanstvo na Makedonija (“ESM”), EVN Macedonia AD (“EVN Macedonia” or the “Company”) is the Former Yugoslav Republic of Macedonia’s (“FYR Macedonia”) sole electricity supply and distribution company serving more than 640,000 customers and a population of 2 million people. In order to finance the Company’s investment program, in 2008 each of IFC and EBRD provided a long term loan of €35 million (IFC’s project number #26093). The loans will be repaid in 18 equal installments that started in July 2011 and will be ending in January 2020.In line with the EU Energy Policy, following the new Energy Law that was enacted in February 2011 and the new secondary regulation, EVN Macedonia and the Macedonian energy market is going through a major reform and liberalization process. Due to the ongoing unbundling of its distribution, supply and generation businesses and the changes to market mechanics the Company is expected to require additional working capital by the beginning of 2012. In order to finance this working capital need and capital expenditures of the Company IFC will provide a long term loan up to €7 million. EBRD also considers participating in the financing. If EBRD, decides to participate the IFC loan amount will be reduced to 3.5 million. The Company’s capital expenditure includes items for high voltage lines, substations, low and medium voltage lines, connections to customers, transformers, meters, telecommunications, and some generation (investment in a new small hydropower project of 1.1MW in 2012). The potential environmental or social impacts of these items are similar to those supported by IFC’s previous investment made in the Company in 2008. The main business of the Company is electricity distribution with about 26,360 km distribution lines. The Company has 11 small hydropower plants (in total 46MW capacity).