North Macedonia has dismantled two small hydropower plants in the Lesnica valley, creating a precedent for energy assets located within protected areas. The plants are identified as Pena 84 and Pena 85. Their removal is linked to activities inside Šar Mountain National Park.
The dismantling of Pena 84 and Pena 85 is described as the country’s first known permanent removal of operating or developed small hydropower infrastructure. It followed years of rapid concession-based construction. Authorities moved beyond equipment removal to include broader site works.
Scope of works and planned restoration along the Pena River
The works included removing generating equipment, pipelines, and associated infrastructure connected with the two plants. Authorities plan to continue by dismantling remaining concrete structures. The next steps also include removing pipeline sections along the Pena River.
After pipeline removal, authorities plan to restore the natural river corridor. The activities are presented as part of ongoing enforcement related to the protected-area setting.
Protected-area rules and Natura 2000/Emerald implications
The management plan for Šar Mountain National Park prohibits new hydropower construction in all protection zones. That restriction applies to development within the park’s designated areas. It frames the regulatory environment for small hydropower projects in the region.
The Lesnica valley is also associated with areas proposed for inclusion in Natura 2000 and Emerald ecological networks. In that context, restoration is described as relevant to North Macedonia’s environmental alignment with the European Union.
Financing risk: enforcement beyond concessions and permits
For investors and lenders, the dismantling is presented as evidence that holding a concession, permit, or historical approval may not prevent later environmental enforcement. Projects located in ecologically sensitive areas may face licence withdrawal and rehabilitation obligations. The same exposure can include stranded construction costs and reputational risk.
The risk is also described as extending to banks financing hydropower portfolios rather than single-asset projects. Environmental due diligence is said to need an assessment of cumulative river-basin effects instead of evaluating each plant separately. Monitoring requirements are highlighted across minimum ecological flows, fish migration, pipeline routes, construction access, and hydrological study reliability throughout operations.
Decommissioning cost responsibility and life-cycle obligations
The case raises questions about who funds decommissioning and restoration costs for removed infrastructure. A bankable small-hydro framework is described as needing to define whether funding comes from the concessionaire, the state, an environmental guarantee, or a dedicated reserve accumulated during operations.
The decision is also described as changing how compliance obligations are treated over time. Environmental compliance shifts from a permitting-stage issue toward a full-life-cycle financial obligation once assets are built. Developers are described as no longer able to assume that completed construction makes an environmentally disputed asset permanent.
Implications for future hydropower project types
North Macedonia’s action is described as not eliminating a role for hydropower in the system. Reservoir projects and larger flexible plants are described as remaining valuable for integrating solar and wind. The focus of weakened investment support is tied to low-output diversion projects in protected mountain rivers.
The source links that weakened investment case to situations where ecological damage is disproportionate to annual generation from such projects. The dismantling of Pena 84 and Pena 85 is positioned as an example of that shift in risk exposure for assets in sensitive locations.
