Montenegrin transmission operator CGES has signed a €25 million state-guaranteed loan with France’s Agence Française de Développement (AFD) on 29 July to modernise the Perućica and Pljevlja 2 substations. A further €8.5 million EU grant is planned through the Western Balkans Investment Framework . The financing package is linked to grid works intended to support additional power flows.
Perućica and Pljevlja 2 substation modernisation
The reconstruction of the 220/110 kV Perućica substation is intended to enable integration of up to 350 MW of hydropower capacity. Work at the 400/220/110 kV Pljevlja 2 facility is designed to strengthen Montenegro’s connection to the Trans-Balkan Electricity Corridor. The Pljevlja 2 works also aim to prepare the northern network for a gradual reduction in coal dependence .
CGES’ sequencing approach is aimed at aligning grid reinforcement with generation commissioning. Montenegro has development ambitions for solar, wind, storage and hydropower that substantially exceed current domestic peak demand. Strengthening substations and transmission paths before associated generation comes online is intended to reduce curtailment and connection-delay risk .
AFD financing and preparation by RTE International
AFD is making its first energy-sector investment in Montenegro under the loan agreement. Technical preparation for the project is attributed to RTE International. The package combines concessional debt, an EU grant and a sovereign guarantee, which is expected to result in a lower financing cost than CGES could obtain through an unsupported commercial loan .
Cross-border trading and the Italy–Montenegro interconnector
The investment is also described as protecting the value of the Italy–Montenegro submarine interconnector. New generation in northern and central Montenegro can earn higher export revenue only if electricity can reach the coastal converter station without being constrained by internal network limitations . This links substation upgrades to cross-border power transfer capability.
CGES operates 1,512 kilometres of transmission lines and 29 substations. The state holds 55.4%, Italy’s Terna holds 22.1%, and Serbia’s Elektromreža Srbije holds 15%. The shareholder structure is described as aligned with Montenegro’s cross-border trading position .
