Montenegro’s state-owned electricity utility EPCG and Abu Dhabi renewable-energy group Masdar have selected the first projects under a new joint-development platform. The programme starts with almost 190 MW of solar capacity and includes studies for more than 400 MW of pumped-storage hydropower.
First solar projects and pumped-storage studies
The initial investment package comprises the 140 MW Stedim solar project and the 50 MW Krupac solar plant. The partners have also agreed to assess pumped-storage options with combined capacity exceeding 400 MW.
The planned storage component is intended to add an energy-storage element to support future solar and wind development. The portfolio could include multiple generation technologies beyond solar, including wind, conventional hydropower, pumped storage, batteries and hybrid generation systems.
50:50 joint venture and renewable capacity target
The projects will be developed through a 50:50 joint venture. The platform is set up to pursue as much as 2 GW of renewable capacity in Montenegro.
The agreement’s relevance for Montenegro extends beyond adding new renewable megawatts. The country’s electricity balance remains highly dependent on hydrology and the availability of the Pljevlja coal-fired power plant.
Grid role, interconnections and Italy cable link
New solar capacity can reduce daytime imports and preserve reservoir water, while also potentially creating surplus output during low-demand hours without storage and stronger market integration. More than 400 MW of flexible pumped storage would enable EPCG and Masdar to absorb low-priced solar generation, provide balancing services and release electricity during evening peaks.
Pumped-storage facilities could also support regional trading across Montenegro’s interconnections with Serbia, Bosnia and Herzegovina, Albania and Kosovo. A submarine cable connecting Montenegro with Italy provides an additional commercial route for the portfolio.
The Italian market has frequently traded at a substantial premium to the Western Balkans, creating an export opportunity when interconnector capacity is available. The location therefore supports a hybrid approach combining domestic supply, regional balancing and sales into Italy.
Project economics, financing and EPCG role
The economics will depend on network capacity, permitting, land access and the structure of offtake arrangements. Utility-scale solar in the Western Balkans faces midday price compression, which can make merchant revenue assumptions less dependable.
Storage, bilateral power-purchase agreements and coordinated dispatch with EPCG’s hydropower assets are identified as factors for protecting project returns. Masdar’s involvement brings international development experience and potential access to lower-cost financing.
EPCG contributes local generation assets, market knowledge, grid relationships and a central position within Montenegro’s electricity sector. The initial 190 MW establishes a starting portfolio within the broader programme focused on integrating solar with pumped storage and cross-border trading.
