LONDON - Renewable energy investor Alcazar Energy Partners said on Tuesday it has launched the largest wind farm project in North Macedonia with an investment of at least $500 million in debt and equity to help generate 400 megawatts of renewable energy.

The Shtip project, located 75 km south of the capital Skopje, is a central part of a deal announced at the COP28 climate talks last year to accelerate the country's shift away from coal-fired power generation.

Construction is set to begin in early 2026.

Once up and running, the project is expected to provide an almost fivefold increase in the country's installed wind capacity, able to power more than 100,000 homes and avoid the release of over 670,000 tons of climate-damaging carbon emissions a year.

"Alcazar Energy views North Macedonia as an especially promising investment location, recognising its significant potential for renewable energy development," Alcazar co-founder Daniel Calderon said in a statement.

Due to its location and grid connections with Greece, Bulgaria, Serbia and Kosovo, the project should help reduce energy shortages and support the energy transition across the broader region.

Financing will be overseen by Alcazar, which recently raised $490 million through Alcazar Energy Partners II, with backing from the U.S. International Development Finance Corporation and other public and private investors.

"This project is of great significance to Europe, given North Macedonia's extensive grid interconnections with its neighbours," said Hristijan Mickoski, Prime Minister of North Macedonia.

"It will supply much-needed clean and affordable energy at a crucial time when the continent is striving to reduce its dependence on fossil fuels."

(Reporting by Simon Jessop Editing by Peter Graff)