North Macedonia’s economy minister Kreshnik Bekteshi requested the withdrawal of the proposed law for the construction of a gas plant of the Greek company Mytilineos in Skopje.
According to Bekteshi, there are concerns around the perceived imbalance in state benefits awarded to certain companies under proposed strategic energy investment laws. For Mytlineos, in particular, it is necessary to ensure not only a guaranteed purchase of electricity, but also to receive a significant direct aid of 50 million euros from the state.
The country’s deputy prime minister for economy affairs Fatmir Bitiki confirmed the existence of the proposal, but expressed skepticism about the competence of the experts who expressed the concerns about the agreement with Mytilineos.
Bitiki claims that the two-and-a-half-year-long extensive negotiations with Mytilineos did not include state aid as part of the strategic investment agreement, stressing the need for approval through a specialized law.
Commission for protection of competitiveness raised the main problem
As negotiations were ongoing, the Commission for the protection of competitiveness expressed concerns specifically related to the provision of state aid. Bitiki said that while he acknowledged some of the Commission's remarks, he remains convinced that the agreements for the construction of strategic energy capacities should progress through the Parliament.
The country’s Engineers Association also expressed concern that the country is making significant concessions without receiving adequate benefits in return. This criticism highlights the delicate balance the government must strike between attracting private investment and protecting the overall interests of the state, local media reported.
Realization of Mytilineos investment fully in accordance with EU regulation, official says
According to the director of the Directorate for Technological Industrial Development Zones (TIRS) Jovan Despotovski, the financial support for the realization of the strategic investment of Mytilineos is fully in accordance with the regulations of the EU and North Macedonia.
"The contract for the lease of electricity production capacity cannot be considered as state aid under any circumstances. State aid is when the state provides a good or service to a private entity at prices that are lower than market prices. With the Mytileneos project, we have a completely reversed situation. Through Power Plants of North Macedonia (ESM), the state receives electricity and thermal energy at prices that are lower than the market price. And we cannot say that the electricity we buy abroad is cheaper than domestic electricity. Just because of the cost to reach us through third countries, the imported electricity becomes at least 10-15 percent more expensive. These are millions of euros that now annually end up in the budgets of other countries, instead of staying with us," says Despotovski.
The official emphasized that the money that the strategic investor Mytilineos will receive from the state, which is 17 percent of the total investment or about 50 million euros, will be poured into the state budget at least 120-150 million euros only on the basis of profit tax.
"For every euro invested, the state, that is, the citizens, will get 2.5 to 3 euros back. Above all, the positive effects for the citizens and the economy from cost savings for CO2 quotas, and especially the contribution to reducing air pollution, especially in Skopje, are enormous. I would like to remind you that for the awarding of this contract for state aid, the preparation of which will follow the adoption of the law on foreign investment in the Parliament, we will request not only the consent of the Commission for the protection of competition, which is provided for by our regulation, but also from The Vienna Energy Community. We are completely open to any dilemma, any suggestion and suggestion," he pointed out.
