North Macedonia: EU provides €70 million investment grant for largest environmental protection project

• North Macedonia’s largest EU investment grant to date was signed today in Skopje.
• The agreement demonstrates EU and EIB commitment under Team Europe to increase regional economic and climate resilience and improve living conditions in the country.
• The EIB Group has now invested a total of €750 million for water and sewage infrastructure in the Western Balkans.

EIB Global, the arm of the European Investment Bank (EIB) for activities outside the European Union, has signed a €70 million EU investment grant with the government of the Republic of North Macedonia to build a wastewater treatment plant in Skopje. Signed on World Water Day, this is the largest EU investment grant allocated to the country under the Western Balkans Investment Framework (WBIF). This important environmental project that will enable better living conditions for some 500 000 people is part of the European Commission’s Economic and Investment Plan and of the Green Agenda for the Western Balkans.

The signing was attended by EIB Vice-President Lilyana Pavlova, Deputy Prime Minister for European Affairs of the Republic of North Macedonia, Bojan Maričić, Minister of Finance Fatmir Besimi, Minister of Environment and Physical Planning Kaja Shukova, EU Ambassador to North Macedonia David Geer and other high-ranking officials. The project is being financed by EIB Global’s €68 million worth loan, complemented with the funds from the European Bank for Reconstruction and Development, the government of North Macedonia, and EU grants channelled through the WBIF.

EIB Vice-President Lilyana Pavlova, who is responsible for operations in North Macedonia, said, “We are extremely proud to be able to deliver this kind of support for North Macedonia in times of prolonged crisis and profound challenges. Signing this grant is a strong demonstration of the Team Europe approach and EU commitment to the country on its path to EU and regional integration, as well as better living standards for all. This project is expected to generate substantial environmental improvements and health benefits, while bringing the country closer to its environment protection and climate targets.”

In its preparatory phase, the project has benefitted from various technical assistance grants from the EIB, EBRD, WBIF and the French government - a testament of the commitment of Team Europe to North Macedonia and its priority projects. Water sector is also among key priorities for EIB Global in the country. This is the second investment in this sector in less than five months, following a €50 million loan signed in November 2022 for the construction and rehabilitation of water supply, wastewater collection and treatment infrastructure, as well as emergency flood protection measures for the 80 municipalities across North Macedonia.

Minister of Finance Fatmir Besimi added, “The agreement we are signing today brings the Republic of North Macedonia a step closer to achieving its goal of joining the European family. The Republic of North Macedonia has commenced negotiations with the European Union and is increasing activities that further this objective. In parallel, reforms aimed at bringing Europe home and implementing European standards for everyday life are picking up speed. In addition to harmonisation with the EU acquis, a key part of this process, we are also pursuing major infrastructure projects that will contribute to the overall development and growth of the economy. Defined strategic projects are being recognised by the European Union and, so far, North Macedonia has been granted funds amounting to €462 million to implement 29 such projects. Their assessed investment value totals €2.6 billion.”

EU Ambassador to North Macedonia David Geer remarked, “The path towards the EU is a process of transformation, of improving lives and living standards. The investment by Team Europe in the Skopje Wastewater Treatment Plant is a practical example of exactly this. The plant will be able to safely treat and clean the wastewater generated by almost one third of the country’s population. It will contribute to the greener European future of this country.”

This investment grant has been signed at the moment when governments, international institutions, scientists and other stakeholders come together in New York to hold the first UN Water Conference in half a century. The EIB, one of the world’s biggest public lenders in the sector, is participating in the conference. On average, the Bank finances €3 billion in water infrastructure every year, with a focus on water security and climate change adaptation. Around 30% of EIB water projects are carried out outside the European Union, including in some of the world’s poorest and most drought-stricken countries. Projects financed alongside regional partners connect cities and villages to clean water and sanitation, enable flood-resistant infrastructure and encourage communities to recycle their water.

In the Western Balkans, the EIB has provided close to €750 million for water and sewage infrastructure, improving inhabitants’ access to drinking water and sanitation services. Our funds have helped build essential water distribution systems and wastewater facilities, as well as flood protection infrastructure and measures for the most severely affected areas. The Bank is looking for possibilities to expand its investments in this sector in line with the latest EU initiative Global Gateway, aiming to mobilise up to €300 billion for sustainable infrastructure projects worldwide.