Problem

North Macedonia, one of Europe’s most coal-dependent countries, has relied on lignite for over half of its electricity generation. The two main coal plants, Bitola and Oslomej, along with associated mines, directly employ around 4,000 workers, while many more depend indirectly on the coal economy through supply chains and local services. Phasing out coal by 2030 is therefore not just an energy challenge but a profound socio-economic one. Entire regions risk depopulation and unemployment if the transition is mishandled. Without careful governance, retraining, and investment in new industries, the shift away from coal could exacerbate inequalities, weaken public support for decarbonisation, and hinder the country’s ambitions for EU accession and sustainable growth.

Response

To address these risks, North Macedonia became the first Western Balkan country to adopt a national Accelerating Coal Transition (ACT) investment plan, developed with the Climate Investment Funds (CIF), the European Bank for Reconstruction and Development (EBRD), and the World Bank. The programme secured an initial $85 million in concessional financing, designed to unlock an additional $591 million from multilateral development banks, with a goal of mobilising €3 billion in public and private finance by 2030. Funds are being channelled into three pillars: (1) coal plant retirement and mine closure, including social safety nets for affected workers; (2) renewable energy deployment, with 400 MW of new capacity and 100 MW of storage; and (3) socio-economic regeneration of coal regions, promoting diversification into manufacturing, services, and green industries. Governance structures include a national Just Transition Council and stakeholder forums that involve trade unions, civil society, and municipal authorities in decision-making. The plan embeds quantified just transition metrics to track progress on jobs, training, and community outcomes. Recognising the need to build trust and provide visible alternatives early, investments are being frontloaded to help communities prepare before technical decommissioning, which has a target date ranging from 2024 to 2027. This model highlights the central role of concessional capital in initiating long-term planning, the importance of behavioural and trust-building dimensions beyond skilling, and the necessity of aligning climate action with broader goals of regional revitalisation and social justice.

Find out more: Just Transition Finance Lab