INTERVIEW - N. Macedonia prepares new debt tool for infrastructure funding

The new project bonds will represent an alternative way for institutional investors to invest in infrastructure projects, Besimi said in a recent interview with SeeNews.

The finance ministry recently introduced other debt instruments, such as development bonds for citizens and green bonds.

In July, the ministry sold 1.448 billion denars ($25 million/23.6 million euro) worth of two-year civic development bonds with a fixed interest rate of 5% per year, more than double the planned amount of 600 million denars. The finance ministry is already preparing a second issue of civic development bonds, Besimi said.

"This is an instrument that will be constantly present on the capital market and will be available to citizens. We plan auctions once or twice a year," Besimi said.

An auction for the country's inaugural green bond will take place on October 3. The finance ministry hopes to raise 10 million euro ($10.6 million), which will be used to support green corporate projects through the Energy Efficiency Fund of the Development bank of North Macedonia.

The new types of government securities are part of the country's Public Debt Management Strategy and Strategy for Development of the Securities Market and in line with its Plan for Accelerated Economic Growth.

"All these instruments have a development component and are aimed at supporting the projects that are planned and in line with the budget. At the same time, some of them are, and some are not, directly related to a specific project. Thus, development bonds are general and are aimed at any developed project, while project bonds will refer to investments in infrastructure projects, and green bonds will relate to environmental projects," Besimi explained.

The finance ministry sees the country's public debt standing at 56.2% of GDP by 2028, the finance minister said. According to the latest available data, the public debt was equivalent to 57.9% of GDP at the end of June.

North Macedonia closed 2022 with public debt equivalent to 59.7% of GDP, of which 65.6% was foreign debt.

(1 euro = 61.46 denars)