Electricity reform in the Republic of Macedonia

Abstract In contrast to some other countries in the South East European region, there has been privatization in the Macedonian electricity sector, and today the government has a majority stake in very few companies. After 2002, the focus of domestic policy shifted to compliance with the EU Energy Directives. The main obstacles to reform arise from low payment discipline, with state institutions among the problem customers, and the fact that prices do not match costs. In order to reduce the adverse effects of the inevitable electricity prices increase to more realistic levels, the paper suggests that sustainable social support mechanisms need to be developed, and proposes some options.