Following a decision by the Government and approval of the text of the agreements, ESM today entered into the temporary management of the Company for production of thermal energy Balkan Energy DOOEL Skopje and the Company for supply of steam and hot water AD Skopje North in bankruptcy.

ESM signed three agreements for business and technical cooperation with the three legal entities of BEG (Production, Distribution and Supply). The agreement envisages ESM entering the management of BEG through the appointment of procurators, persons employed in ESM, whose signature will be tied to the signature of the managers of the company BEG. All decisions, contracts and payments will be realized with two signatures, ie without the consent of the procurator from ESM, BEG will not be allowed to make payments and conclude contracts.

The funds that ESM will receive from the Government for dealing with the crisis with the heat supply, will pay occasionally, in the required amounts, to the dedicated account that BEG will open in accordance with the contract and from which the payments will be made with a tied signature.

The funds of 6 million Euros earmarked by the Government for dealing with the heat crisis, according to the agreement will be used for gas supply for production of heat in BEG, for procurement of thermal energy undertaken by the manufacturer TE-TO and for other costs exclusively related to the production process.

BEG will transfer to the dedicated account every day and all its inflows that arrive to its other accounts.

During the contract for business-technical cooperation, BEG will make payments to third parties exclusively through the dedicated account and with the consent and signed signature of the procurator.

BEG guarantees the invested funds received by the state, with a promissory note signed by the founder of BEG. The return of funds to ESM will be realized in 2023, following the decision of the Energy Regulatory Commission to determine the costs for the heating season.

ESM, on the other hand, will submit monthly financial reports to the Government on the funds spent for dealing with the heat crisis and reports on the complete operation of the interim management.

The Government instructed ESM to take over the responsibility for crisis management of the supply of central heating in the city of Skopje, given that ESM is the largest state energy company and through it can be managed funds from the state budget. ESM also has its own system for supplying heat to a part of Skopje, and from there has the resources and staff to take over the management of the overall supply of the city.

The purpose of introducing crisis management of the heat supply is to provide central heating by the end of the heating season, given that suppliers have stated that they do not have the means to procure gas for heat production after the extreme jump in gas prices.