<div><h2>Project Description</h2><p></p><p>The EBRD is considering providing a senior unsecured loan of up to € 26.4 million to the Macedonian Transmission System Operator AD ("MEPSO", or the "Company"). The proceeds of the EBRD financing will be used to finance the construction of (i) 400/110kV substation near Miletkovo, (ii) new 110kv OHTL connection and rehabilitation of the existing 110kV overhead transmission lines and substations in and between Miletkovo, Valando and Strumica, and (iii) develop a training center for high voltage grid operators and other sectoral specialists (the "Project"). The Project will also benefit from (i) € 7.8 million investment grant from the Western Balkans Investment Fund (WBIF) and € 0.5 million grant from the Climate Investment Fund Accelerating Coal Transition ("CIF ACT"). The total project cost will be € 34.7 million.</p><p></p><h2>Project Objectives</h2><p></p><p>Overall, the Project will enable MEPSO to strengthen further the transmission network in the southeast region of North Macedonia. This development is pivotal for integrating a considerable array of Renewable Energy ("RE") power plants with the TSO system. The realization of this project is also projected to significantly reduce energy losses, with an estimated reduction of approximately 14.5 GWh annually. Additionally, it will develop a training centre for high voltage grid operators in the coal-affected southwest region targeting not only MEPSO grid operators but also other sectoral workers affected by the green energy transition.  </p><p></p><h2>Transition Impact</h2><p>ETI score: 72</p><p style="margin-top: -13px;"></p><p>The Project's transition impact stems from <em>Green </em>and <em>Inclusive </em>qualities. The operation will deliver climate energy efficiency benefits by targeting a decrease in electricity transmission losses and will allow the potential connection of up to 1,170 MW of additional renewable energy sources in the country, which currently are not possible due to limited capacity of the local transmission grid. The Project will promote human capital development by supporting MEPSO in setting up a training centre in the Southwest region targeting not only its grid operators but also other sectoral workers affected by the green energy transition.</p><p></p><h2>Client Information</h2><p>MEPSO AD</p><p style="margin-top: -13px;"></p><p>MEPSO, the 100% state-owned electricity transmission system operator ("TSO") of North Macedonia, was incorporated as an independent TSO in 2005, following the unbundling of the old vertically integrated state-owned utility ESM was unbundled into 3 major companies.</p><p>MEPSO's business activity is: (i) transmission of electricity; (ii) management of the electric power system by dispatching electricity throughout the country, as well as balancing the power system; and (iii) organisation and management of the Macedonian electricity market.</p><p></p><h2>EBRD Finance Summary</h2><p>										EUR 26,400,000.00									</p><h2>Total Project Cost</h2><p>										EUR 34,700,000.00									</p><h2>Additionality</h2><p></p><p>The EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions. Such financing is necessary to structure the Project. Additionally, the EBRD offers a tenor, that is longer than what is available to the Client in the market on reasonable terms and conditions.</p><p></p><h2>Environmental and Social Summary</h2><p></p><p>Categorised B (2019 ESP). Environmental and social ("E&amp;S") due diligence ("ESDD") was conducted by an independent consultant for the two Project's components, i.e., Sub-project 1 - Construction of a new 400/110 kV substation near Miletkovo located in Gevgelija Municipality with its connection to the existing 400 kV and 110 kV transmission network; and Sub-project 2 - new connection and rehabilitation of the existing 110kV transmission lines and substations in and between Miletkovo, Valandovo and Strumica  Municipalities. The independent assessment included a company audit and assessment of E&amp;S project risks and impacts in line with EBRD's E&amp;S Policy and Performance Requirements ("PRs"). Additionally, an E&amp;S assessment of the associated facility related to the project, i.e. the development of a training centre for high voltage grid operators, which would include refurbishment of the existing facility of the client, procurement of equipment and development of the training curriculum was carried out by ESD, and included the review of the associated renovation CAPEX and assessment of the location and surrounding area with regards to any sensitive receptors. </p><p>The ESDD findings showed that the Company has a set of E&amp;S procedures in place for mitigation of the E&amp;S risks during the Project's implementation and operation.  These have been developed as part of the external certification for the ISO 9001 (quality management), ISO 14001 (environmental management), ISO 45001 (health and safety management) as well as ISO 50001 (energy management), including an Environment Protection Policy.  ESDD has identified areas for improvement required to structure the Project to align with the Bank's 2019 PRs and good international practice.  These have been included in an Environmental and Social Action Plan ("ESAP"). The ESAP has been agreed with the Client.  </p><p>National permitting procedures will need to be adhered to and a set of permits obtained in line with ESAP. A project-specific Construction Environmental and Social Management Plan ("CESMP") is to be developed in line with ESAP, based on the Framework ESMP which has been prepared for the project as part of the ESDD.  The client will need to set requirements in the tender documentation for the construction contractor and third-party supervision to appoint environmental, social and health and safety specialists as part of their teams. Operational impacts will be managed by the client within existing Environmental and Social Management System and procedures in place.  The client fully complies with the North Macedonian Labour Law, and the company's HR provisions and procedures are in line with local requirements and comply with PR 2. The contractors will need to implement an internal grievance mechanism for workers to fully comply with PR2. Pollution risks during construction will be managed by a Pollution Prevention and Control Plan and Soil Management and Erosion Control Plan, while construction noise will be managed by a Noise Management Plan, as stipulated in the ESAP. Construction - Waste Management Plan as part of the CESMP will be developed and implemented by the appointed Contractor(s) to ensure all construction and demolition waste is properly managed according to Macedonian law and EU waste management requirements. Climate resilience measures need to be incorporated into the Project design documentation to reduce vulnerability to future climate change. ESAP stipulates development and implementation of several management plans to mitigate health and safety impact during construction phase. </p><p>It is expected that project will result in land acquisition.  A Land Acquisition and Resettlement Framework ("LARF") has been prepared as part of the ESDD in line with PR5, including measures for closing gaps with PR5. ESAP stipulates preparation of a Land Acquisition and Resettlement Plan (LARP) based on the Framework, which will be developed once the exact nature and scope of land acquisition become known, to ensure full compliance with PR5. The Sub-Project 1 is not located in Natura 2000 site or locally protected areas; however, the wider geographical area of River Vardar corresponds to known bird migratory route. Regarding the Sub-Project 2, existing 110 kV transmission line passes through one locally protected area - Park of Nature Cham Chiflik in 0.5 km long section, and one internationally recognised site i Important Plant Area Belasica (IPA) in 2.8 km long section. Therefore, optimisation of the position of the transmission line has been done as part of the ESDD to fully avoid impacts to protected area Park of Nature Cham Chiflik, as well as the use of a power underground cable is selected for the section in Strumica, to reduce overall length through IPA from 2.8 km to 1.6 km. In line with requirements of PR6, the ESAP stipulates the following measures: (i) development of a Bird Protection Plan at corporate level; (ii) installation of bird diverters; (iii) seasonal restrictions of vegetation clearance from April to June; (iv) prohibition of works in sensitive area near River Vardar; and (v) preparation of a Biodiversity Action Plan. Impacts to known cultural heritage sites in the wider area of the project are avoided as part of the route selection and optimisation process, in line with mitigation hierarchy of EBRD's E&amp;S Policy. No impacts on the known cultural heritage are expected and chance finds will be managed through a Chance Find Procedure, as stipulated by ESAP. </p><p>Interested stakeholders have been consulted during ESDD through individual or group meetings. The Stakeholder Engagement Plan ("SEP") has been prepared for the Project and includes a grievance mechanism to address complaints of external stakeholders, in line with the ESAP. Both SEP and Non-Technical Summary will be publicly disclosed in English and local language. The Bank will monitor the implementation of the Project through review of annual monitoring reports and visits as required.</p><p></p><h2>Technical Cooperation and Grant Financing</h2><p></p><p>Technical Cooperation for up to EUR 230,000, for training curricula to promote upskilling and reskilling energy sector employees in the country and the region, under the Gender &amp; Economic Inclusion ("G&amp;EI") Technical Assistance Framework, is expected to be provided by an international donor ("CIF") to support the design and implementation of the G&amp;EI activities.</p><p></p><h2>Company Contact Information</h2><p>Erol Kecap<br/>erol.kecap@mepso.com.mk<br/>https://www.mepso.com.mk/index.php/en/<br/></p><h2>PSD last updated</h2><p>24 Apr 2024</p><div id="docsLinks" style=""><h2>Related material</h2><ul class="relMat"><li><a href="https://www.ebrd.com/work-with-us/projects/psd-translation/54625/1395320067346/MEPSO_-_Transmission_grid_strengthening_(Macedonian).pdf?blobnocache=true" title="Download document">Translation: MEPSO - Transmission grid strengthening (Macedonian)</a> <i class="glyphicon glyphicon-download-alt"></i><br/><small>Type: PDF, Published: 01.05.2024, Language: Macedonian</small></li></ul></div><script type="text/javascript">						var projFinderService = '/project-finder-json?1=1';						var projectId = "54625";					</script><h2>	Understanding Transition</h2><p>	Further information regarding the EBRD’s approach to measuring transition impact is available <a href="https://www.ebrd.com/what-we-do/economic-research-and-data/transition-impact.html">here</a>.</p><h2>	Business opportunities</h2><p>	For business opportunities or procurement, contact the client company.</p><p>	For business opportunities with EBRD (not related to procurement) contact:</p><p>	Tel: +44 20 7338 7168<br/>	Email: <a href="mailto:projectenquiries@ebrd.com">projectenquiries@ebrd.com</a></p><p>	For state-sector projects, visit <a href="https://www.ebrd.com/pages/workingwithus/procurement.shtml">EBRD Procurement</a>:<br/><br/>	Tel: +44 20 7338 6794<br/>	Email: <a href="mailto:procurement@ebrd.com">procurement@ebrd.com</a></p><h2>	General enquiries</h2><p>	Specific enquiries can be made using the <a href="https://www.ebrd.com/eform/information-request">EBRD Enquiries form</a>.</p><h2>	Environmental and Social Policy (ESP)</h2><p>	The <a href="https://www.ebrd.com/news/publications/policies/environmental-and-social-policy-esp.html">ESP</a> and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.</p><p>	More information on the EBRD’s practices in this regard is set out in the <a href="https://www.ebrd.com/news/publications/policies/environmental-and-social-policy-esp.html">ESP</a>.</p><h2>	Integrity and Compliance</h2><p>	The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.</p><p>	OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to <a href="mailto:compliance@ebrd.com">compliance@ebrd.com</a>. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.</p><h2>	Access to Information Policy (AIP)</h2><p>	The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the <a href="https://www.ebrd.com/what-we-do/strategies-and-policies/public-information-policy.html">Access to Information Policy</a> page to find out what information is available from the EBRD website.</p><p>	Specific requests for information can be made using the <a href="https://www.ebrd.com/eform/information-request">EBRD Enquiries form</a>.</p><h2>	Independent Project Accountability Mechanism (IPAM)</h2><p>	If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).</p><p>	IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its <a href="https://www.ebrd.com/news/publications/policies/environmental-and-social-policy-esp.html">Environmental and Social Policy</a> or Project-specific provisions of its <a href="https://www.ebrd.com/what-we-do/strategies-and-policies/access-to-information-policy.html">Access to Information Policy</a>; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.</p><p>	Please visit the <a href="https://www.ebrd.com/project-finance/independent-project-accountability-mechanism.html">Independent Project Accountability Mechanism webpage</a> to find out more about IPAM and its mandate; how to <a href="https://www.ebrd.com/eform/IPAM/Request_form">submit a Request</a> for review; or contact IPAM  via email <a href="mailto:ipam@ebrd.com">ipam@ebrd.com</a> to get guidance and more information on IPAM and how to submit a request.</p><p>	 </p></div>

MEPSO - Transmission grid strengthening

The EBRD is considering providing a senior unsecured loan of up to EUR 26.4 million to the Macedonian Transmission System Operator AD MEPSO, or the Company. The proceeds of the EBRD financing will be used to finance the construction of i 400110kV substation near Miletkovo, ii new 110kv OHTL connection and rehabilitation of the existing 110kV overhead transmission lines and substations in and between Miletkovo, Valando and Strumica, and iii develop a training center for high voltage grid operators and other sectoral specialists the Project. The Project will also benefit from i EUR 7.8 million investment grant from the Western Balkans Investment Fund WBIF and EUR 0.5 million grant from the Climate Investment Fund Accelerating Coal Transition CIF ACT. The total project cost will be EUR 34.7 million.Overall, the Project will enable MEPSO to strengthen further the transmission network in the southeast region of North Macedonia. This development is pivotal for integrating a considerable array of Renewable Energy RE power plants with the TSO system. The realization of this project is also projected to significantly reduce energy losses, with an estimated reduction of approximately 14.5 GWh annually. Additionally, it will develop a training centre for high voltage grid operators in the coal-affected southwest region targeting not only MEPSO grid operators but also other sectoral workers affected by the green energy transition.  ETI score: 72The Project's transition impact stems from Green and Inclusive qualities. The operation will deliver climate energy efficiency benefits by targeting a decrease in electricity transmission losses and will allow the potential connection of up to 1,170 MW of additional renewable energy sources in the country, which currently are not possible due to limited capacity of the local transmission grid. The Project will promote human capital development by supporting MEPSO in setting up a training centre in the Southwest region targeting not only its grid operators but also other sectoral workers affected by the green energy transition.MEPSO ADMEPSO, the 100 state-owned electricity transmission system operator TSO of North Macedonia, was incorporated as an independent TSO in 2005, following the unbundling of the old vertically integrated state-owned utility ESM was unbundled into 3 major companies.MEPSO's business activity is: i transmission of electricity; ii management of the electric power system by dispatching electricity throughout the country, as well as balancing the power system; and iii organisation and management of the Macedonian electricity market.EUR 26,400,000.00EUR 34,700,000.00The EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions. Such financing is necessary to structure the Project. Additionally, the EBRD offers a tenor, that is longer than what is available to the Client in the market on reasonable terms and conditions.Categorised B 2019 ESP. Environmental and social ES due diligence ESDD was conducted by an independent consultant for the two Project's components, i.e., Sub-project 1 - Construction of a new 400110 kV substation near Miletkovo located in Gevgelija Municipality with its connection to the existing 400 kV and 110 kV transmission network; and Sub-project 2 - new connection and rehabilitation of the existing 110kV transmission lines and substations in and between Miletkovo, Valandovo and Strumica  Municipalities. The independent assessment included a company audit and assessment of ES project risks and impacts in line with EBRD's ES Policy and Performance Requirements PRs. Additionally, an ES assessment of the associated facility related to the project, i.e. the development of a training centre for high voltage grid operators, which would include refurbishment of the existing facility of the client, procurement of equipment and development of the training curriculum was carried out by ESD, and included the review of the associated renovation CAPEX and assessment of the location and surrounding area with regards to any sensitive receptors. The ESDD findings showed that the Company has a set of ES procedures in place for mitigation of the ES risks during the Project's implementation and operation.  These have been developed as part of the external certification for the ISO 9001 quality management, ISO 14001 environmental management, ISO 45001 health and safety management as well as ISO 50001 energy management, including an Environment Protection Policy.  ESDD has identified areas for improvement required to structure the Project to align with the Bank's 2019 PRs and good international practice.  These have been included in an Environmental and Social Action Plan ESAP. The ESAP has been agreed with the Client.  National permitting procedures will need to be adhered to and a set of permits obtained in line with ESAP. A project-specific Construction Environmental and Social Management Plan CESMP is to be developed in line with ESAP, based on the Framework ESMP which has been prepared for the project as part of the ESDD.  The client will need to set requirements in the tender documentation for the construction contractor and third-party supervision to appoint environmental, social and health and safety specialists as part of their teams. Operational impacts will be managed by the client within existing Environmental and Social Management System and procedures in place.  The client fully complies with the North Macedonian Labour Law, and the company's HR provisions and procedures are in line with local requirements and comply with PR 2. The contractors will need to implement an internal grievance mechanism for workers to fully comply with PR2. Pollution risks during construction will be managed by a Pollution Prevention and Control Plan and Soil Management and Erosion Control Plan, while construction noise will be managed by a Noise Management Plan, as stipulated in the ESAP. Construction - Waste Management Plan as part of the CESMP will be developed and implemented by the appointed Contractors to ensure all construction and demolition waste is properly managed according to Macedonian law and EU waste management requirements. Climate resilience measures need to be incorporated into the Project design documentation to reduce vulnerability to future climate change. ESAP stipulates development and implementation of several management plans to mitigate health and safety impact during construction phase. It is expected that project will result in land acquisition.  A Land Acquisition and Resettlement Framework LARF has been prepared as part of the ESDD in line with PR5, including measures for closing gaps with PR5. ESAP stipulates preparation of a Land Acquisition and Resettlement Plan LARP based on the Framework, which will be developed once the exact nature and scope of land acquisition become known, to ensure full compliance with PR5. The Sub-Project 1 is not located in Natura 2000 site or locally protected areas; however, the wider geographical area of River Vardar corresponds to known bird migratory route. Regarding the Sub-Project 2, existing 110 kV transmission line passes through one locally protected area - Park of Nature Cham Chiflik in 0.5 km long section, and one internationally recognised site i Important Plant Area Belasica IPA in 2.8 km long section. Therefore, optimisation of the position of the transmission line has been done as part of the ESDD to fully avoid impacts to protected area Park of Nature Cham Chiflik, as well as the use of a power underground cable is selected for the section in Strumica, to reduce overall length through IPA from 2.8 km to 1.6 km. In line with requirements of PR6, the ESAP stipulates the following measures: i development of a Bird Protection Plan at corporate level; ii installation of bird diverters; iii seasonal restrictions of vegetation clearance from April to June; iv prohibition of works in sensitive area near River Vardar; and v preparation of a Biodiversity Action Plan. Impacts to known cultural heritage sites in the wider area of the project are avoided as part of the route selection and optimisation process, in line with mitigation hierarchy of EBRD's ES Policy. No impacts on the known cultural heritage are expected and chance finds will be managed through a Chance Find Procedure, as stipulated by ESAP. Interested stakeholders have been consulted during ESDD through individual or group meetings. The Stakeholder Engagement Plan SEP has been prepared for the Project and includes a grievance mechanism to address complaints of external stakeholders, in line with the ESAP. Both SEP and Non-Technical Summary will be publicly disclosed in English and local language. The Bank will monitor the implementation of the Project through review of annual monitoring reports and visits as required.Technical Cooperation for up to EUR 230,000, for training curricula to promote upskilling and reskilling energy sector employees in the country and the region, under the Gender Economic Inclusion GEI Technical Assistance Framework, is expected to be provided by an international donor CIF to support the design and implementation of the GEI activities.Erol Kecaperol.kecapmepso.com.mkhttps:www.mepso.com.mkindex.phpen24 Apr 2024Translation: MEPSO - Transmission grid strengthening Macedonian Type: PDF, Published: 01.05.2024, Language: MacedonianFurther information regarding the EBRD's approach to measuring transition impact is available here.For business opportunities or procurement, contact the client company.For business opportunities with EBRD not related to procurement contact:Tel: +44 20 7338 7168Email: projectenquiriesebrd.comFor state-sector projects, visit EBRD Procurement:Tel: +44 20 7338 6794Email: procurementebrd.comSpecific enquiries can be made using the EBRD Enquiries form.The ESP and the associated Performance Requirements PRs set out the ways in which the EBRD implements its commitment to promoting "environmentally sound and sustainable development".  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders' concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project's environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.More information on the EBRD's practices in this regard is set out in the ESP.The EBRD's Office of the Chief Compliance Officer OCCO promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to complianceebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.Specific requests for information can be made using the EBRD Enquiries form.If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful e.g. through the Client's Project-level grievance mechanism or through direct engagement with Bank management, individuals and organisations may seek to address their concerns through the EBRD's Independent Project Accountability Mechanism IPAM.IPAM independently reviews Project issues that are believed to have caused or to be likely to cause harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipamebrd.com to get guidance and more information on IPAM and how to submit a request.

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