The Montenegrin Government has unveiled a significant financing initiative aimed at bolstering the state-owned utility, EPCG. This comprehensive plan focuses on both modernizing hydropower infrastructure and stabilizing the company’s financial health through a combination of long-term loans and debt restructuring measures.
A key component of this initiative is a 40 million euros credit line from KfW, designated for the third phase of enhancements at the Perućica hydropower plant. This funding will facilitate the installation of a new generating unit, A8, alongside critical refurbishments of water channels and turbine upgrades. These improvements are anticipated to increase operational efficiency and extend the facility’s lifespan, aligning with Montenegro’s broader energy strategy.
The loan terms span ten and a half years, incorporating a five-year grace period. The interest rate will be determined based on a fixed margin plus the relevant swap rate. This investment is part of Montenegro’s efforts to enhance generation capacity and ensure a reliable electricity supply in the long term. Moreover, it aims to improve system flexibility, facilitating better integration of renewable energy sources into the national grid.
In addition to the modernization funding, the Montenegrin Government has approved another financing arrangement worth 30 million euros. This allocation is intended to refinance short-term obligations that have accumulated due to electricity imports during outages at the Pljevlja thermal power plant, as well as periods of diminished hydropower output.
Officials have clarified that this refinancing does not constitute new net debt but rather represents a restructuring of existing commitments. Consequently, while EPCG’s overall financial exposure remains stable, this move is expected to enhance its short-term liquidity, positioning the utility more favorably in the evolving energy landscape.
