EPCG secures €40 million loan for HPP “Perućica” upgrade

EPCG (Electric Power Company of Montenegro) and the German Development Bank (KfW) have finalized a €40 million loan agreement to finance the installation of the A8 unit at the “Perućica” Hydropower Plant. This funding is part of the third phase of the plant’s reconstruction and expansion project. The loan is secured through the European Fund for Sustainable Development Plus (EFSD+), a novel financial instrument in the region. It features a 15-year repayment period, including a 5-year grace period.

The addition of the A8 unit is a significant step in EPCG’s efforts to transition to greener energy production and advance the decarbonization of Montenegro’s energy sector.

EPCG Executive Director Ivan Bulatović expressed his pleasure at continuing the productive partnership with KfW. He emphasized that this agreement represents a major contribution to the development of the plant and highlights Montenegro’s growing credibility in the international financial arena.

Pablo Obrador, KfW’s Director for Southeast Europe and Turkey, noted that this agreement completes the trilogy of loans KfW has provided for the modernization of HE “Perućica.” The combined investments now exceed €83 million, showcasing a substantial level of collaboration and progress facilitated by EFSD+ guarantees.

Energy Minister Prof. Dr. Saša Mujović underscored the importance of vision and strategy in the energy sector. He highlighted that modernizing HE “Perućica” is crucial for ensuring a stable energy supply, with its full impact expected to be realized once water from the Zeta River is integrated into the reservoir.

The upgrade will boost the capacity of Montenegro’s oldest major power plant from 307 MW to 365.5 MW. The new A8 unit, along with units A6 and A7, will be connected to a third pressurized pipeline designed to handle the full flow.

In addition to the financial support, EPCG will receive technical assistance to support its transformation into a green, market-oriented company. An international tender for the fabrication, delivery, installation, and commissioning of the A8 unit will be announced in October, with the unit expected to be operational by 2027.