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North Macedonia has signed a landmark Strategic Partnership Agreement with the United Kingdom, securing a financial framework of up to €6 billion to fund key infrastructure and development projects. This agreement represents a significant opportunity for the country’s long-term economic and fiscal growth.
Project-Based Financing Structure
According to Finance Minister Gordana Dimitrieska-Kocoska, the funding is project-based, meaning that funds will only be drawn as specific projects are implemented. “Borrowing begins only when payments start,” she emphasized, underlining the importance of responsible and purposeful spending.
Favorable Interest Rates Under Negotiation
The exact interest rate is still being negotiated. Still, the minister assured that it would be comparable to rates offered by international financial institutions like the World Bank, EBRD, and European Investment Bank. It was lower than the 7% currently paid for significant infrastructure projects like the Bechtel & Enka Corridor.
Transparent, Long-Term Investment
Minister Dimitrieska-Kocoska highlighted that this agreement reinforces international confidence in North Macedonia’s fiscal governance. The framework allows for gradual implementation, avoiding the financial risk of borrowing large amounts prematurely. The first payments under the agreement are expected in 2027.
She noted the UK’s interest mirrors that of other international institutions that see potential in North Macedonia’s development trajectory, pointing to the strategic nature of the agreement.
Impact on Public Debt and Economic Growth
The minister expressed confidence that the project will contribute to GDP growth while positively affecting the public debt trajectory. She anticipates a future budget surplus that will allow the country to begin repaying its obligations sustainably.
Regarding a separate Hungarian loan to support the private sector, she reaffirmed that terms and conditions are publicly available and that the Development Bank channels funds through commercial banks, which bear the lending risk.
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