The €1bn tender for the construction of the 333 MW Cebren hydropower plant (HPP) in North Macedonia has failed as the Greek concessionaire, Archirodon, failed to extend the bank guarantee, which expired on December 31.

The inception and design of the ambitious Cebren hydropower project date back to initial feasibility studies in the 1960s. It will have a dam towering at 192 metres, ranking among the tallest globally. However, successive governments have failed to get the project off the ground over the last six decades. 

Cebren holds paramount importance for North Macedonia's energy transition and the wider region, given its potential to balance renewable energy sources. When built, it will also play a crucial role in flood protection, water supply and agriculture.

Prior to the current call, no less than 13 unsuccessful tenders were made in the past two decades. After the 14th effort to grant a concession for the Crna Reka project, it was announced in September 2023 that a Greek concessionaire would independently undertake the construction HPP under a profit-sharing agreement. 

However, the deal has now fallen apart. Minister of Environment and Spatial Planning Kaja Shukova announced on January 3 that the ministry will officially report to the government about the failed tender.

Shukova highlighted that, according to the tender documentation, the bidder was required to enter into a joint venture agreement with the state-run power producer ESM while the bank guarantee was active. However, the concessionaire failed to fulfill this requirement and did not extend the bank guarantee beyond December 31, MIA reported.

Since the bank guarantee is no longer active and the offer is deemed invalid, the ministry cannot proceed further, Shukova said.

She said that despite attempts to obtain additional information from the company, none was received.

Shukova speculated that the company might have faced challenges securing loans from banks under the given conditions, ultimately leading to the withdrawal from the project.

She declined to delve into the reasons for the Greek company's decision but suggested that public discourse may have influenced the outcome.

Some experts in the public domain had expressed reservations about proceeding with a concessionaire, advocating instead for the independent construction of the Cebren hydropower plant.