North Macedonia has dismantled two small hydropower plants in the Lesnica valley, establishing a precedent for energy assets located inside protected areas. The plants are Pena 84 and Pena 85, which were removed from Šar Mountain National Park. The removal is described as the country’s first known permanent dismantling of operating or developed small hydropower infrastructure after years of rapid concession-based construction.
Dismantling scope and planned restoration work
The works included removal of generating equipment, pipelines and associated infrastructure tied to the two plants. Authorities plan to continue by dismantling remaining concrete structures. The next steps also include removing pipeline sections along the Pena River and restoring the natural river corridor.
The decision places the Lesnica valley within a wider protected-area framework. The management plan for Šar Mountain National Park prohibits new hydropower construction in all protection zones. The Lesnica valley is also linked to areas proposed for inclusion in the Natura 2000 and Emerald ecological networks.
Implications for permitting, enforcement and financing
For investors and lenders, the dismantling indicates that holding a concession, permit or historical approval may not prevent later environmental enforcement. Projects in ecologically sensitive locations can face licence withdrawal, rehabilitation obligations, stranded construction costs and reputational risk. The case is presented as part of a changing risk profile for small hydropower across the Western Balkans.
The risk is also described as relevant to banks financing hydropower portfolios. Environmental due diligence is required to consider cumulative river-basin effects rather than evaluating each plant separately. Minimum ecological flows, fish migration, pipeline routes, construction access and the reliability of hydrological studies are cited as elements needing continuous monitoring during the operating period.
Decommissioning cost responsibility and project lifecycle obligations
The case also raises questions about who funds decommissioning and restoration. A bankable small-hydro framework is described as needing to define whether restoration is financed by the concessionaire, the state, an environmental guarantee or a dedicated reserve accumulated during operations.
North Macedonia’s approach does not remove hydropower from the system entirely. Reservoir and larger flexible plants are described as remaining valuable for integrating solar and wind generation. At the same time, the dismantling is said to weaken the investment case for low-output diversion projects in protected mountain rivers where ecological damage is disproportionate to annual generation.
With Pena 84 and Pena 85 removed, environmental compliance is characterized as shifting from a permitting-stage issue to a full-life-cycle financial obligation. Developers are described as no longer being able to assume that completed construction makes an environmentally disputed asset permanent.
