Representatives from Elektroprivreda Crne Gore (EPCG) and the German Development Bank (KfW) have finalized a €40 million loan agreement to fund the installation of an eighth generator at Montenegro’s Perućica Hydroelectric Plant. This move is part of the third phase of an extensive reconstruction and expansion project at the country’s oldest major power facility.
The financing is supported by the EFSD+ guarantee, a new mechanism created through collaboration between the European Commission and KfW. The loan features a 15-year repayment term with a five-year grace period.
The addition of the new generator is integral to EPCG’s strategy to enhance the environmental performance of its energy production. It aligns with Montenegro’s broader objectives to decarbonize its energy sector. EPCG CEO Ivan Bulatović expressed his enthusiasm for the agreement, noting its importance in advancing the company’s green transformation efforts.
“We are delighted to have secured this agreement, which significantly contributes to the development of Perućica. It represents a favorable arrangement, being the first of its kind issued with the EFSD+ guarantee instead of a state guarantee. This reflects the international community’s recognition of our credibility and underscores our commitment to decarbonization,” Bulatović said.
Pablo Obrador, KfW Director for Southeast Europe and Turkey, highlighted the longstanding and successful partnership between EPCG and KfW.
“This loan completes a trilogy of financing for the modernization of Perućica. Investments related to this plant, including this contract, total over €83 million, underscoring the depth of our cooperation and progress with the EFSD+ guarantees,” Obrador noted.
Montenegro’s Minister of Energy, Prof. Dr. Saša Mujović, stressed the importance of strategic vision and planning in energy projects, citing the historical context of facilities like Perućica and Piva.
“Energy projects demand meticulous planning and execution. Plants such as Perućica and Piva were the result of a strong state with clear goals. Our generation now carries the responsibility of modernizing and enhancing these facilities. The modernization of Perućica is crucial for ensuring a stable energy supply, and its full impact will become evident once the Zeta River is redirected into the reservoirs,” Mujović remarked.
The installation of the new 58.5 MW A8 generator will increase the Perućica Hydroelectric Plant’s total capacity from 307 MW to 365.5 MW. This generator will be connected to the third pressure pipeline, designed to accommodate a full flow of 3 x 12.75 m³/s, alongside existing generators A6 and A7.
In addition to financial support, EPCG will receive technical assistance to aid its transition to a more environmentally friendly and market-oriented company. An international tender for the production, delivery, installation, and commissioning of the A8 generator is set to be announced in October, with commissioning anticipated in 2027. In April, EPCG also signed a contract with CGES to connect to the transmission system, marking another significant step in the infrastructure upgrade.