EBRD urges Macedonia to proceed with power sector liberalisation

By bne IntelliNews November 21, 2013

Accelerating reforms in Macedonia’s power sector is one of the key priorities for the country for 2014, the EBRD said in the latest Transition Report published on Nov 20.

The EBRD notes that the Balkan country’s energy regulator again postponed the full liberalisation of the electricity market, moving the deadline to January 2014. The move was apparently caused by expectations for a significant increase in the price of electricity for households.

The EBRD commented that at present there is a substantial cross-subsidy from industrial consumers to households. It also noted the regulator’s decision to cut end-user electricity tariffs by 5% as of July 1, 2013. “With tariffs already below cost-reflective levels, this reduction will be a further disincentive to much-needed investments in this sector”, the EBRD commented.

The other two key priorities for Macedonia for 2014 include strengthening the judiciary and the rule of law, as well as making efforts to address unemployment.

The EBRD also pointed out that the Macedonian government did not manage to sell the four large state-owned enterprises, namely Ohis (chemicals), EMO Ohrid (electrical engineering), Tutunski Kombinat AD Prilep (tobacco), and 11 Oktomvri Eurokompozit (weapons). Repeated sale attempts remained unsuccessful due to both weak company fundamentals and difficult economic conditions, the EBRD said.

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