When North Macedonia ended its long diplomatic dispute with Greece over its name earlier this year (having originally emerged from the break-up of Yugoslavia as the Former Yugoslav Republic of Macedonia), it marked a step forward in the country’s ambitions.

Deputy prime minister Kocho Angjushev says North Macedonia plans to encourage outside investment, and so membership of NATO and the EU membership are crucial to the country, with key sectors for potential investors in North Macedonia including energy, automotive components, ICT, agribusiness and food processing, textiles, electronics and pharmaceuticals. 

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Investment incentives

“We’re rolling out programmes to promote FDI that aim to boost the country’s industrialisation and energy strategy,” says Mr Angjushev. “We achieved FDI of €625m in 2018, representing more than 6% of GDP. That’s 260% more than the previous year. We have a scheme that supports all FDI into the country. This helps with location searches, providing opportunities in free zones. It also offers 10-year tax holidays: both corporation tax and personal tax on salaries are zero for 10 years.

“Additionally, we offer 10% support for R&D centres, including employee salaries. This programme has helped us to attract investment in more than 20 factories in the past year-and-a-half. As a result, we’ve reduced unemployment by 5% in the past two years, and GDP has grown by 4.1% in the past quarter alone.” 

Mr Angjushev says the government’s target is to grow the country's GDP by 5% a year. “This is doable if we develop energy and industry," he says. "By building these foundations, we aim to attract FDI that brings with it higher added value. We also aim to keep FDI at between 5% and 10% [of our GDP], equivalent to between €500m and €1bn per year.”

North Macedonia is in the process of acceding to NATO, and a date for the start of EU accession talks is expected by October. “If you want to attract investment, you need a good business environment, backed by crucial preconditions, such as stability and the rule of law,” says Mr Angjushev. “Both of these come with EU and NATO membership. The start of an era of Atlantic integration backed by a positive political and economic environment is bringing more stability, and this has already helped us to increase our exports, by 15% last year.”

Energy issues

North Macedonia is wholly dependent on imports for oil, and it is currently taking steps to break up the existing gas pipeline monopoly. “We’re committed to developing a second gas line, which will be interconnected through Greece and will increase competition, thereby reducing prices,” says Mr Angjushev. 

An estimated 70% of the country’s electricity needs are fulfilled domestically, and the government is working on increasing the percentage of renewable energy sources in the energy mix. 

“At the moment about 17% of our electricity production comes from renewables, and we’re aiming to reach 30% by 2030,” says Mr Angjushev. “Parliament passed an energy law in May 2018, which has enabled us to open a lot of space for renewables: we’ve been very successful in building small hydropower plants in conjunction with German and Italian investors. We’ve also started on a big 350-megawatt hydro project and we will be announcing the tendering process for a public-private partnership by the end of the year.”

Sunny future?

North Macedonia is keen to exploit its potential for solar, according to Mr Angjushev. “Because of our position in southern Europe, we can produce almost twice as much solar energy as Germany – 2000 hours per year with full installed capacity.

"We’re welcoming investment in solar photovoltaic [PV] power plants. We are preparing the infrastructure and the connection to the network. We’ll then use a transparent auction process to sell each location to companies. We will be awarding plots of land to investors that seek the lowest feed-in premium. Additionally, we’re inviting companies to build PV power plants on their own land, and this is also going through the auction process.  

“Finally, we’ve determined that because of the stability of our network, we can build 150 megawatts to 200 megawatts in wind turbine capacity. At the moment, it’s about 36 megawatts, so we’re inviting potential investors to come to North Macedonia and find out about investment opportunities.”