Although a landlocked country, Macedonia benefits from a strategic geographical position at the crossroads of two major pan – European transportation corridors (corridors VIII and X) linking Central Europe to the Adriatic, Aegean and Black Sea. Macedonia’s immediate neighborhood provides an actual and potential consumer market of about 30 million people. As a whole, South Eastern Europe is a market of over 80 million people.

Macedonia has an extensive network of paved highways and secondary roads. A major highway parallels the railroad along the North-South corridor. Several undergoing projects, both in Macedonia and in the neighboring countries, are aimed at upgrading and completing the North – South and East – West connections.

The Government obtained financing for some extensive construction and re-construction works on the Corridor X road network (the North – South connection). It is expected that with the completion of these construction works, a full highway network will be in place from Serbian to Greek borders.

The railway network extends over 900 km. The principal North-South rail connection from Belgrade to the port of Thessaloniki (Aegean Sea) passes through Skopje. Both network and rolling stock are in need of investment. The rail system is still State owned but in 2007 the railways company was split into two separate entities (infrastructure and rolling stock) as a preparatory step for privatization.

At the end of 2012 the Government has announced a public tender for construction of the railway Corridor VIII, which will allow access on the railway traffic to the ports in Drac and Valona.

Macedonia has two international airports, in Skopje and Ohrid. In March 2010 the Turkish airport operator TAV took both airports under a concession for a 20 – year period with objectives to upgrade the existing facilities. In 2011 the upgrade was completed with new landing strips and airport building. Under the operation of TAV the number of passengers has increased to about 800,000 during 2011 and 910,000 during 2012.

 Telecommunications

The country has a well-developed fixed communications network with a density of over 20 lines per 100 inhabitants, within the region average. The former state monopoly – Makedonski Telekomunikacii was privatized in 2001: Magyar Telekom (Deutsche Telekom Group) now holds a majority stake in the company, while the State remains a minority shareholder. Three mobile operators are active on the market: T – Mobile Macedonia, (a subsidiary of Makedonski Telekomunikacii), One (owned by Telekom Slovenia) and VIP (a subsidiary of Mobilkom Austria). The mobile networks cover up to 99% of the population. The mobile market penetration rate is about 100% of the population.

The full liberalization of the telecommunications sector is on-going and international fixed line operators, competing with the incumbent operator, have entered the market since 2006, such as On.Net, Nextel and Cosmofon (On.net and Cosmofon, both owned by Telekom Slovenia, have now been merged under the joint brand “One”).

Macedonia recognizes the importance of the “digital economy” and several steps have been taken in this direction. Legislation, in the shape of the Law on Data in Electronic Form and Electronic Signature and Bylaws has been in place since 2001, whereby all necessary laws have been modified to enable and validate the use of an electronic signature. At the same time, steps have been taken for establishing the first Certification Authority (CA) for the purposes of the Government, private persons and companies.

 Energy

Macedonia is striving to become self-sufficient in electrical energy. The total annual generation of electricity amounts to slightly above 6,000GWh, mostly from thermal and hydroelectric sources, covering about 65% of domestic energy needs.

In line with European policies, the State Electricity Utility has been restructured into 4 independent units: two for generation, one for transmission and one for distribution of electricity. The distribution company has subsequently been privatized in 2006 and 90% of the shares were sold to EVN (Austria).

The generation capacities are still mostly State-owned. They include four coal-fired power plants with an installed capacity of about 800MW and over 20 small and medium hydro-power plants with an installed capacity of above 537MW. The 210MW oil-powered Negotino plant is used only during peak periods and cold reserve. Attempts to privatize it and subsequently convert it to gas have not been completed.

As private investment, a combined cycle gas power and heating plant with average annual capacity of the power plant of 220 MW for electricity generation and up to 160 MW for heat production was constructed in the suburb of Skopje. There is a number of new generation projects on-going, most of them aimed at tackling the country’s vast hydro-energetic potential. They include, among other:

  • the two large (over 500MW altogether) hydro-power plants at Cebren & Galiste;
  • large number of small and medium hydro facilities.

The country imports all its oil and gas needs. A pipeline brings oil from Thessaloniki to the country’s only refinery, OKTA, which is owned by Hellenic Petroleum. A natural gas pipeline brings Russian gas from the Bulgarian border to Skopje and the gas distribution network is in development.

*Source: PWC

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