The Macedonian and German governments, Macedonian Power Plants (ELEM) and KfW bank signed Tuesday agreements over implementation of the project for construction of a new central heating system in Bitola, Novaci, Mogila and Logovardi.

KfW will provide ELEM with a EUR 39 million loan at a record-low interest rate of 1.5 percent, while the Macedonian company will secure the remaining EUR 7.5 million.

Vice Premier and Finance Minister Zoran Stavreski said the introduction of a central heating system in Bitola and its surrounding has been an idea contemplated for decades.

"This now becomes a reality, as promised at the last local elections", said Stavreski.

According to the project, the waste heating energy of mining-energy combine (REK) Bitola would be used through the construction of a heating energy production system, a 12.5km pipeline, primary heating station in Bitola, distribution network in Bitola and forks to Novaci, Mogila and Logovardi.

German Deputy-Head of Mission Hans-Helge Sander stressed the project demonstrated the fruitful cooperation between the countries' governments.

"The funds will be transferred in installments upon completion of the works and retroactively refunded to the contracting company. Funds will not be transferred in advance. The project will be monitored by an international technical consultant that will also follow the payments", said Sander.

KfW manager Rainer Suennen said the main focus of bilateral cooperation is climate change and environment protection.

"This is an important project that resumes the fruitful cooperation with our Macedonian partners. We have already implemented projects with ELEM in the framework of the energy efficiency and renewable energy programme, namely the rehabilitation of six hydro plants and construction of the Bogdanci wind park. Now we are launching the Bitola project that will contribute to increased energy efficiency in local terms and beyond. Besides environmental improvements and replacement of energy resources, the Bitola citizens will also have fresh job opportunities", added Suennen.

ELEM director-general Dejan Boskovski said the heating system would have a direct effect on the reduction of incineration emissions from wood, oil, crude oil and fossil fuels.

"This will directly affect the air quality and the people's quality of life in the region", said Boskovski, adding the system would be put into use in late 2018.