FYR Macedonia Public Expenditure PBG

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The development objective of the Public Expenditure Policy Based Guarantee (PEPBG) Program for The Former Yugoslav Republic of Macedonia (FYR Macedonia) is to improve the efficiency of public expenditures by strengthening public financial management practices; improving the efficiency of service provision in the health sector; and strengthening social protection and inclusion. This PEPBG states a guarantee in the amount of EUR155 million (US$201.5 million equivalent) in support of a commercial loan to the FYR Macedonia. The single tranche operation supports reforms to improve the efficiency of public expenditures and public financial management, to strengthen health systems, and to improve the targeting of social assistance and social inclusion. The PEPBG will help the FYR Macedonia access international financial markets to address an expected financing gap in 2013. In the current difficult financial environment, a partially-secured financing structure would facilitate FYR Macedonia's access to market funding at a longer tenor and under more favorable terms than would otherwise be possible. Beyond the current turmoil, the PEPBG will help FYR Macedonia preserve continued market access at reasonable terms, expand over the medium-term its name in the international financial market and help the domestic financial market to develop. The operation is part of the World Bank's additional crisis-related assistance to FYR Macedonia aimed at mitigating the impact of the renewed Euro zone turmoil.