THE SUSTAINABLE DEVELOPMENT STRATEGY OF · PDF fileNew Airports built in Skopje and Ohrid •Capacity 4 million passengers •Terminal building – 40.000 m2 and Cargo hangar with

Republic of Macedonia Deputy Minister

for Environment & Physical Planning

StevoStevo TemelkovskiTemelkovski

Deputy Deputy MinisterforMinisterfor Environment Environment

and Physical Planningand Physical Planning

BobeBobe CecevCecev Cabinet of Vice Prime-Minister

in charge of Economic Affairs

October, 2012October, 2012

Circular Economy Week Circular Economy Week

of Rhinelandof Rhineland--Palatinate Palatinate

THE SUSTAINABLE DEVELOPMENT STRATEGY

OF MACEDONIA:COOPERATION OPPORTUNITIES

FOR GERMAN PARTNERS



Country Challenges

• Small size and landlocked

• Volatile global economy

• Needs for investments and new

technologies

• Low visibility and region perception

Pillars of the Strategy

• Macroeconomic stability

• FTAs and infrastructure (TDIZ)

• Create excellent climate for investors

• Develop world class human capital

• Invest in energy sector

• Use of the existing natural resources

• Attract FDI and promote Macedonia

Economic StrategyEconomic Strategy



Source: National Bank of the Republic of Macedonia

EXPORT BY YEAR (US$ bn)

AVERAGE GROSS SALARY IN 2011AVERAGE GROSS SALARY IN 2011

€ 497 per month

CURRENCYCURRENCY

Macedonian Denar pegged to the DM/€

for the last 10 years (€1= MKD 61.3)

INFLATIONINFLATION

Average inflation < 2% p.a. over the last 10y

2006: 3,2%; 2007: 2,3%; 2008: 8,3%; 2009: -0,8%; 2010: 1,6%

CREDIT RATINGS 2011CREDIT RATINGS 2011--20122012

No downgrading in the last two years

Standard & Poor’s: BB; Fitch: BB+

BUDGET DEFICIT & STATE DEBTBUDGET DEFICIT & STATE DEBT

Budget Deficit: 2,5% of GDP

State Debt: 28,2% of GDP

2,4 3,4

4,0

2,7 3,3

4,4

0

2006 2007 2008 2009 2010 2011

24 20,6

23,9 24,6 28,2

2007 2008 2009 2010 2011

GOVERNMENT DEBT AS % OF GDP

Stable Macroeconomic IndicatorsStable Macroeconomic Indicators

5,0 6,1

5,0

-0,9

1,8

3,3

2006 2007 2008 2009 2010 2011

REAL GDP GROWTH RATE (%)



• Sound and stable financial system with

no spillover of the debt crisis

• Loans are financed predominantly by

local deposits (L/D ratio of 0,89)

• Financial system consists of 17 banks, 9

saving houses, 13 insurance companies

and 9 leasing companies

• Interest rates for companies in range of

5,5% up to 12,0% (CB rate of 4%)

• Foreign banks have 73% of the market

• Recently the following international

banks entered Macedonian market:

• Austrian Sparkasse Bank

• French Societe Generale Bank

• Turkish Halkbank

Financial SystemFinancial System



Regulatory Reforms

• 1-Stop-Shop: 4h Company Registration

• Regulatory Guillotine (“Silence is

Consent”, “Cutting Red Tape”)

• Electronic One-Stop-Shop for Customs

Permits and Licenses

• Simplification and reduction of taxes

and custom procedures

Cadastre and Real Estate Reforms

• Digital Cadastre accessible on-line

covering 99% of the Real Estate

• Foreigners free to purchase real

estate and construction land

• Construction permit in just 3 steps

• State land auctioned at 1 €/m2

Improvements in the Business ClimateImprovements in the Business Climate

94 92

75

69

32 34

22

2006 2007 2008 2009 2010 2011 2012

Rank of Macedonia on the Ease of Doing Business Indicator, World Bank "Doing Business"

Reports 2006-2012

82

35

2007 2011

Rank of Macedonia among the Best

Countries for Business, Forbes Magazine


for Environment & Physical Planning Doing Business in MacedoniaDoing Business in Macedonia

33rdrd BEST REFORMERBEST REFORMER

IN THE WORLDIN THE WORLD World Bank’s Doing Business 2010 ReportWorld Bank’s Doing Business 2010 Report

3535thth BEST COUNTRY FORBEST COUNTRY FOR

BUSINESS IN THE WORLDBUSINESS IN THE WORLD

FoForbes Magazinerbes Magazine

55thth IN THE IN THE EASEEASE OF PAYINGOF PAYING

TAXESTAXES PwC and World Bank Group Study PwC and World Bank Group Study

2222ndnd BEST COUNTRY FOR BEST COUNTRY FOR

BUSINESS IN THE WORLDBUSINESS IN THE WORLD World Bank’s Doing Business 2012 ReportWorld Bank’s Doing Business 2012 Report

Ease of Doing

Business Rank

Starting a Business

Dealing with Construction

Permits

Getting Electricity

Registering Property

Getting Credit

Protecting Investors

Paying Taxes

Trading Across

Borders

Enforcing Contracts

Resolving Insolvency

Germany 19 98 15 2 77 24 97 89 12 8 36

Macedonia 22 6 61 121 49 24 17 26 67 60 55

Austria 32 134 76 21 35 24 133 82 25 9 21



Investments in Education

• Education Budget 5-6% of GDP

• Free textbooks for students in elementary

and high schools (both are mandatory)

• English introduced in the 1st grade el.sch.

• International schools

• Opened two new universities, over 50 new

R&D laboratories, textbooks from top 100

world universities, scholarships

Information Technology

• One Computer per Child policy

• ICT Development Index – 51st out of 159

• Internet penetration rate - EU average

• Migration of government services on-line

(taxes, health, customs, employment, etc.)

Education and ICTEducation and ICT



New Airports built in Skopje and Ohrid

• Capacity 4 million passengers

• Terminal building – 40.000 m2 and

Cargo hangar with 40.000 t.

• Successfully negotiated as a concession

with Turkish concessionaire

• In the first year, traffic is up by 30%

Completion of Coridor X and VIII

• Corridor X is to be complete on full

motor highway standard by 2016,

with financing already secured

• Concession model to be offered for

three more sections on Corridor VIII

• Preparations started for completion

of railway connection to Bulgaria

Enhancements in InfrastructureEnhancements in Infrastructure



• Lease of land for agricultural (at the

moment 4000 ha available)

• Good climate and soil (280 sunny days)

• Food processing opportunities with 28

locations for purchasing centers

• Abudance of water and irrigation

• Financial subsidies for enhancing

productivity and quality (3 year plan)

• Foreign investors already present

Agribusiness OpportunitiesAgribusiness Opportunities



• Construction of national gas transport system (value ≈ €350mn)

• Opening of lignite mines for electricity production (value ≈ €200mn)

• PPP with the National Power Producer “Elem” for the construction

of a combined cycle heat and power plant (value ≈ €250mn)

• An ongoing tender – under the auspices of the IFC advisory services

for two large HPP “Cebren and Galiste” (value ≈ €600mn)

• Rehabilitation of the existing hydropower plants (value ≈ €100mn)

• HPP “Boskov Most” and “Lukovo Pole” (value ≈ €200mn)

• Privatization of the minority share (up to 49%) of the state owned

electricity generation company ELEM (book value ≈ €1.2bln)

• Construction of three new 400 kV overhead lines (value ≈ €60mn)

• New SCADA, (re)construction of more than 200 km of numerous 110

kV overhead lines (value ≈ €45mn)

New Investments in Energy SectorNew Investments in Energy Sector


for Environment & Physical Planning Renewable energy sources Renewable energy sources

• The global commitment to environmental

protection

• Strategic objectives in energy sector of the

Government - greater involvement of RES in energy

consumption and increasing of Energy Efficiency

• Creating conditions for sustainable energy

development in the state

• In Macedonia there are favorable conditions for

utilization of RES



• Based on Energy Law in the field of RES the following documents was adopted in the previous period

Decree for feed in tariffs for electricity

Decision for total installed capacity of preferential generators for each RES separately

Decision for the target share of energy produced form the RES in the total energy consumption, as well as the manner and dynamic for reaching the target share

Rulebook for RES

• New power plants for produce electricity from RES - status of a preferential

producers and use feed –in tariffs

• Priority access to electricity systems for the electricity generated from

renewable sources (possibilities in the electricity system)

Renewable energy sources Renewable energy sources


for Environment & Physical Planning Electricity feedElectricity feed--in tariffsin tariffs

Power plant

Feed- in tariff

€¢/kWh

Period of

feed-in tariff

Limitation by

power plant

Limitation on

the state level

1

HYDRO POWER PLANTS

(Quantity of electricity delivered per

block (kWh)

Feed-in tariff for

electricity delivered per

block (€¢/kWh)

20 years

≤ 10 MW

/

I ≤ 85.000 12,00

II > 85.000 и ≤ 170.000 8,00

III > 170.000 и ≤ 350.000 6,00

IV > 350.000 и ≤ 700.000 5,00

V > 700.000 4,50

2

WIND POWER PLANTS

feed-in tariff for

electricity generated

and delivered by wind

power plants

8,9 €¢/kWh

20 years

50 MW

2016 - 65 MW

2020 - 100 MW

2025 - 150 MW

3

PHOTOVOLTAIC POWER PLANTS

(Installed capacity of the power plant)

feed-in tariff for

electricity generated

and delivered by wind

power plants

15 years

≤ 1 MW

Total 10 MW

≤ 0,050 MW

30 €¢/kWh

2 MW

> 0,050 MW- ≤ 1 MW

26 €¢/kWh

8 MW



Power plant Feed- in tariff

€¢/kWh

Period of

feed-in

tariff

Limitation

by power

plant

Limitation on

the state

level

4

BIOMASS-FUELLED THERMAL

POWER PLANTS

(Installed capacity of the power plant)

If the share of fossil

fuels in the total

energy contents of

used fuels is lower or

equal to 15%, feed-in

tariffs for electricity

generated and

delivered by

biomass-fuelled

thermal power plants

15 years

≤ 3 MW

10 MW

≤ 1 MW 11 €¢/kWh

> 1 МW- ≤ 3 MW 10 €¢/kWh

If the share of fossil fuels in the total energy contents of used fuels is higher than 15%, and lower or

equal to 30%, the discounted feed-in tariffs shall be calculated according to the following formula:

PT = PT0 × (1.15 – p x 0.01) × 0.01

Where: −РТ shall be the discounted feed-in tariff; −PT0 shall be the tariff referred to in paragraph

(5) of this article, depending on the power plant’s installed capacity; −p shall be the share (in

percent) of fossil fuels, as determined by the Ministry.

Electricity feedElectricity feed--in tariffsin tariffs


for Environment & Physical Planning Electricity feedElectricity feed--in tariffsin tariffs

Power plant Feed- in tariff

€¢/kWh

Period of

feed-in tariff

Limitation by

power plant

Limitation on

the state level

5

BIOGAS-FUELLED THERMAL

POWER PLANTS

(Installed capacity of the power plant )

If the share of fossil

fuels in the total

energy contents of

used fuels is lower or

equal to 10%, feed-in

tariffs for electricity

generated and

delivered by biogas-

fuelled thermal power

plants shall be

15 years

≤ 2 MW

Total 10 MW

≤ 1 MW 15 €¢/kWh 2 MW

> 1 МW- ≤ 2 MW 13 €¢/kWh 8 MW

If the share of fossil fuels in the total energy contents of used fuels is higher than 10%, but

lower or equal to 20%, the discounted feed-in tariffs shall be calculated according to the

following formula: PT = PT0 × (1.10 – p x 0.01) × 0.01

Where: −РТ shall be the discounted feed-in tariff; −PT0 shall be the tariff referred to in

paragraph (5) of this article, depending on the power plant’s installed capacity; −p shall be the

share (in percent) of fossil fuels, as determined by the Ministry



• Government in 2011 adopt the Strategy on

RES until 2020

• The main objective of the Strategy is to

provide information on the potential and

possible exploitation of RES

Quantification of such knowledge shall be made

by determining the following:

Target share in total energy

(RES target),( 21% by 2020)

Manner and dynamics of attaining RES

target and RES electricity target

Strategy on use of RES by 2020 Strategy on use of RES by 2020



Setting the national target for RES share in the final energy consumption,

in the year 2020

RES share in 2005 Value

Final energy consumption 19 666 GWh

+ non-energy consumption 407 GWh

+ electricity losses 1 593 GWh

+ heat losses 93 GWh

+ own electricity consumption 721 GWh

+ own heat consumption 116 GWh

Gross final energy consumption in the year 2005, (А) 21 783 GWh

HPP generation in 2005 1477 GWh

÷ Capacity factor (CF) in 2005 32.70%

× Average capacity factor (CF) for the period 1992-2005 25.30%

Normalized HPP generation in 2005, (B) 1 144 GWh

Other RES in 2005, (C) 1 872 GWh

Total normalized generation from RES, (D) = (B) + (C) 3 016 GWh

RES share in 2005 (E) = (D) / (А) 13.8%

Equitable RES increase by 2020 (G) 5.5%

Additional RES increase weighted by GDP, (H) 1.2%

National target on RES share in 2020, (E) + (G) + (H) 20.5%

Setting the national target for RESSetting the national target for RES



• Subsidies for baying and install solar thermal collectors in the households

• Memorandum of Understanding regarding the participation of the Republic of

Macedonia in the third pillar of the CIP, Intelligent Energy-Europe program

CONSTRUCTION OF ENERGY FACILITIES FOR PRODUCING CONSTRUCTION OF ENERGY FACILITIES FOR PRODUCING

ELECTRICITY FROM RESELECTRICITY FROM RES

• Small Hydro Power Plants - four public competition for granting water

concession for electricity production from small hydro power plant (47

Concession Agreements were signed, total install capacity 34,7 MW)

• Photovoltaic systems - Several photovoltaic systems obtain status of

preferential producer and use feed in tariff.

• Wind farm - Government of the Republic of Macedonia in June 2011 issued

authorization for constructing wind farm to the AD ELEM.

• Biogas thermal power plants – Government in March 2011 issued

authorization for constructing of combined cycle heat and power plants on

biogas.

Measures and activities for RES promotion Measures and activities for RES promotion


for Environment & Physical Planning Opportunities in TourismOpportunities in Tourism

General Policies

• Free Tourist Zones, with opportunities

for hotel and resort development

• Subsidies for tour operators of 25 € per

tourist

• Over 50 projects to improve the offer

• In 2011, increase in overnight stays of

tourists from EU of 38%

• Over 50 tectonic and glacial lakes and

45 mountain peaks over 2.000 m

• Country is 70% mountainous, many

locations with over 100 days of snow

• Wartersports, archeological, wine, eco

and rural tourism



Tourist Development Zones

• Eight tourist development zones located

nearby the lakes with opportunities for

hotel and resort development

• Exemption of personal income tax for a

period of 10 years

• Land purchase with at public auctions -

starting price of 1 € per m2

• Initial investment is a subject of exempt

from paying VAT on construction materials

Subsidies per tourist for organized tourist trade

• Air transport: 25 € for intercontinental flights

• Bus transport: from 10 to 20 €

• For regional tour:15 €

• Criteria: Groups with at least 10 tourists spending at least 3 nights

Opportunities in TourismOpportunities in Tourism



Historical and Cultural Heritage and

Spa tourism

• 4,293 archeological sites

• 992 churches and monasteries

• 23,000 icons (2nd most valuable

collection in the world)

• 228 mosques, inns, Turkish baths and

old bazaars

• Birthplace of Cyrillic alphabet

• Home country of Mother Theresa

• Territory rich with geothermal waters

• More than 60 thermal springs (27–

720C)

• Identified locations for construction

of new spa centers and hotels

Opportunities in TourismOpportunities in Tourism



• FTAs to 650 mil+ market

• Strategically located for entrance of

German companies to regional market

• Solid logistics (Germany is one of our

stable growing trading partners)

• Macroeconomic Stability

• Exceptional track record in reforms

• Attractive Tax Policies

• Incentives in Free Economic Zones

• Available and competitive work force

(41.5% of the population under 30)

• Commitment to education and ICT

• Business friendly Government, willing

to work hand-in-hand with you

Why Macedonia?Why Macedonia?



• Clean Energy and Climate Change together are top key priorities in

the European agenda for achieving sustainability, as well as for my

country under the National Strategy for Sustainable Development.

• All sustainable energy projects/interventions/practices result in

corresponding reduction of greenhouse gas emissions, contributing

effectively to climate change mitigation.

• Eco-innovations will thus become a key driver of growth,

competitiveness and employment.

• Good governance in energy, environmental and water sectors is one

of the key factors and driving force for achieving better life-style.



Thank you for Thank you for attention!attention!

Documents

THE SUSTAINABLE DEVELOPMENT STRATEGY OF · PDF fileNew Airports built in Skopje and Ohrid •Capacity 4 million passengers •Terminal building – 40.000 m2 and Cargo hangar with