Investors from the United Arab Emirates, France and the United States are interested in investing in Montenegrin energy - primarily in solar and wind power plants, energy storage systems and grid modernization.
Investments in network modernization and the construction of renewable energy sources (RES) are worth hundreds of millions of euros, and if we do not react quickly, we will not be interesting on the investment market. In this context, Elektroprivreda Crne Gore (EPCG) must play a key role as a mandatory partner in every serious project.
This was stated by the Minister of Energy and Mining for "Vijesti". Admir Šahmanović.
He pointed out that discussions with potential investors are ongoing and that Montenegro offers a stable investment environment, strategic locations and the possibility of long-term concessions for the production of clean energy in this process.
"Montenegro offers a stable investment environment, strategic locations for the construction of energy facilities and the possibility of long-term concessions for the production of energy from renewable sources, with the mandatory involvement of the national operator EPCG," said Šahmanović.
The Minister announced that the National Energy and Climate Plan of Montenegro, which specifies that the Pljevlja Thermal Power Plant will operate until 2041, will soon be put to a public hearing.
"According to the draft, the Pljevlja Thermal Power Plant will continue to operate until 2041, with gradual modernization and emission reduction. Communication with the European Energy Community is at a high level, with the Director Artur Lorkovsky "I recently had the opportunity to discuss this topic and in general we have had encouraging reactions to the proposed date," said Šahmanović.
When will the Ministry of Energy submit the proposal for the National Energy and Climate Plan to the Government for adoption? The plan envisages the shutdown of the Pljevlja Thermal Power Plant by 2041, and the Secretariat of the Energy Community (EC) has been asked to understand that Montenegro cannot achieve the goals set for it by 2030. Has this request for TPP been accepted and has it been accepted that Montenegro cannot achieve the goals set for it by 2030?
We have accelerated the dynamics of work on this document to the maximum, and the activity schedule is as follows: the Draft National Energy and Climate Plan will soon be subject to public debate, after which, with possible corrections in relation to the quality and justification of suggestions and comments, it will be prepared and sent to the Government for consideration and adoption. It is very thankless to bid on when exactly it will be sent to the Government, but let's take into account that the public debate lasts 45 days, and after that, as I said, there will be harmonization with the comments from the public debate, as well as obtaining the final opinion of the Energy Community Secretariat. Our goal is for the process to be transparent and I would really be pleased to receive quality and realistic suggestions.
According to the Draft, the Pljevlja Thermal Power Plant will continue to operate until 2041, with gradual modernization and emission reduction. Communication with the EC is at a high level, I recently had the opportunity to discuss this topic with Director Artur Lorkovski and in general we have encouraging reactions to the proposed date. As for the goals set for 2030, this is not just a challenge for our country, all countries in the region have the same “problem”, to a greater or lesser extent, and I would say that the EC understands the complexity of the situation in which the countries of the Western Balkans find themselves.
The targets for 2030 are set quite ambitiously, given the relatively short timeframe for their achievement compared to EU countries. When preparing the National Energy and Climate Plan for Montenegro, achieving the target for reducing CO2 emissions by 2030 was particularly challenging, and we are still waiting for the final position of the European Commission and the EU on “sink emissions” (emissions that are naturally absorbed by land, forests or oceans - carbon sinks). I believe that through further dialogue with international partners, we will bring our positions closer together, which will make the process of planning policies and measures to achieve the goals more realistic.
How is it planned to replace the operation of the Thermal Power Plant in terms of total electricity production and the impact on the stability of the energy system?
Together with the most important energy entities in the country, the Ministry of Energy and Mining is focused on the intensive development of renewable energy sources, such as solar and wind power plants, which will significantly contribute to the gradual reduction of the capacity of the Thermal Power Plant. This will not be an easy process, nor can it be completed in the mandate of one minister, but I truly believe that we must be more agile, that the entire system must be activated, and that together with all instances of society, we must provide stronger support for the development of projects from renewable energy sources (RES).
Now, I would say, we are in a very contradictory situation, we want to reduce CO2 emissions, not only because of obligations to the EU, but also because of improving air quality, and therefore the quality of life of the citizens of Montenegro. On the other hand, there is significant resistance at all levels to new projects, which will be a source of “clean energy”. I understand the resistance, it is not unjustified, of course, that all local communities protect their space, but I am very concerned about the complete absence of dialogue and constructive proposals on how to move forward. Our goal is to ensure the stability of the grid and reduce dependence on coal through strategic investments in solar power plants, wind farms, hydroelectric power plants and modern energy storage systems.
There is also a focus on improving energy efficiency and regional energy connections, including a submarine cable with Italy and future projects with countries in the region. In 2024, over 60% of production came from renewable sources, which is an excellent result, above the European average. However, last year's "power system failure" in Montenegro and the region, the recent situation in Spain, which for example recorded a 56% share of renewable sources in its energy mix in 2024, shows the vulnerability of the power grid, the infrastructure of which, in large part, dates back to the 20th century. Montenegro is no exception and that is why I insist that we must react faster and work on the modernization of transmission and distribution systems, while simultaneously developing regional corridors.
You announced the signing of an energy agreement with the United Arab Emirates (UAE) and that there is an investor from that country who is ready to invest. Can you specify in which energy sector this investor wants to invest, is it renewable sources, distribution, production or something else, and when the agreement you announced is expected to be signed?
I announced the possibility of signing an agreement with the UAE that could represent a strategic turning point for the energy sector in Montenegro. The focus of investors from the UAE is, above all, on renewable energy sources, especially solar and wind energy, but there is also interest in modern technologies in the field of energy storage and improvement of the electricity distribution network. This topic is a continuation of my previous answer, investments in the modernization of the network and the construction of RES investments are worth hundreds of millions of euros. Strategic partnerships are a practice that is also practiced by much more economically wealthy countries and if we do not react quickly, we will not be interesting on the investment market.
The goal is to secure significant investments in clean energy capacities through the partnership, which would reduce energy dependence and accelerate the transition to green energy. If we find mutual interest, the text of the agreement itself could be formalized in the coming months, after the completion of final negotiations and the harmonization of technical details. I want to emphasize very clearly that we are not only talking with the UAE regarding a strategic partnership in the field of energy. In the previous period, there were preliminary talks with France, companies from the USA, and there are also various international consortia, which consider Montenegro as an investment destination with powerful potential, especially in the area of RES development.
What specifically does Montenegro offer in these talks?
Montenegro offers a stable investment environment, strategic locations for the construction of energy facilities and the possibility of long-term concessions for the production of energy from renewable sources, with the mandatory involvement of the national operator EPCG. Also, our strategic geographical position allows easy access to regional markets, with a direct connection to the EU via a submarine cable with Italy. These are the key advantages that we present to partners from the UAE, but not only to them. The wrong narrative has been created in the public about these talks and interest in investing in Montenegro. We do not offer investors from the UAE anything that we do not also present to other credible partners from Europe and the world. In the modern context, the development of energy cannot be viewed in isolation, as a separate island. Globalization brings numerous changes and challenges, including technological innovations, economic fluctuations and geopolitical tensions. In particular, Russia's aggression against Ukraine has emphasized the need for diversification of energy sources and strengthening energy security in Europe.
Montenegro has a unique opportunity to position itself as an energy hub of the region, relying on energy instead of tourism alone. By increasing transmission capacity, we can become a key link in the Southern Energy Corridor of the European Union, enabling the diversification of energy sources and significantly improving the security of supply of the EU. This strategy not only contributes to energy stability, but also accelerates the economic and political integration of Montenegro and the region into the EU, making us a strategically important partner.
In the past period, Montenegro has significantly improved its legal and institutional framework, which has contributed to improving the investment climate in the field of RES. As a result, we currently have around 50 projects in various stages of development, with a total capacity of over 5,5 GW, in the field of solar and wind technology. Given that Montenegro's current production capacity is slightly more than 1 GW, this represents a significant step towards the energy transition.
In the coming period, we will focus on finding incentive models for the implementation of these projects. We are already planning to launch a call for solar energy auctions next month, inspired by the successful model from Serbia. For example, in the second round of auctions for the award of market premiums for RES projects, held in November 2024, Serbia awarded incentives for 10 new wind and solar power plants, with a total capacity of 645 MW, with a planned investment value of 782 million euros.
We expect that a similar auction model in Montenegro will trigger investments of over a billion euros. This approach will ensure affordable electricity prices for Montenegrin citizens for at least the next 12 years, improve security of supply and enable the implementation of the EU's energy goals.
How are any talks with an investor even conducted if the content of the agreement has not yet been defined? Is this the same scenario we had in the case of negotiations with the owner of the Eagle Hills company, Mohamed Alabar, with whom government officials spoke even before the signing of the agreement in non-transparent procedures?
Discussions with investors are a standard procedure that includes preliminary agreements on the potential and interests of both parties, before entering the phase of drafting a formal agreement. One of the tasks of high-ranking officials and ministers at all conferences and forums is to present the country's potential in all sectors. Last week, on the sidelines of BEF2025, I had a number of extremely useful conversations with credible companies that are already developing or planning projects in Montenegro.
The experiences of investors who already have a developed business are extremely important to us, and even more important is to hear what their interests are and what their investment opportunities are. Any other direction, in my opinion, is frivolous and represents either a reflection of ignorance or the deliberate creation of a negative narrative. My question is, who benefits from Montenegro stagnating? In this case, there is a clearly defined intention to invest in renewable energy sources, and the Ministry of Energy and Mining insists on complete transparency in all phases of negotiations.
Montenegro has requested an exemption from the CBAM (payment of a special tax on carbon dioxide) until 2030, although its application begins as early as January 1, 2026. Considering that the application of this mechanism would bring large financial burdens for the Pljevlja Thermal Power Plant, do you really believe that the EU will have the political will to accept this request?”
Montenegro, through institutional channels and diplomatic negotiations, has clearly emphasized the need for an exemption from the CBAM mechanism until 2030. Our request is based on the specific economic and social circumstances, as well as the energy transition process we are currently in. We are aware that the implementation of the CBAM from 2026 could significantly affect the operation of the Thermal Power Plant and the overall stability of the energy system, which would also have consequences for energy prices for citizens and the economy. We believe that the EU understands the challenges we face and that there is political will to find solutions that would enable a just transition, in line with European decarbonization goals. In parallel, we are already working on modernizing and improving environmental standards in Pljevlja, in order to fulfill environmental obligations and reduce the negative impact on the environment.
Montenegro has a unique opportunity to position itself as an energy hub of the region, relying on its economy on energy instead of solely on tourism. By increasing transmission capacities, we can become a key link in the European Union's southern energy corridor, said Šahmanović
What are the plans of the Ministry of Energy for 2025 regarding the construction of the Komarnica hydroelectric power plant? When will the position of the Environmental Protection Agency on the Environmental Impact Assessment Study be known?
Potentially, the Komarnica hydroelectric power plant represents one of the strategic projects in the field of energy and is the most prepared project in terms of documentation. This is not just an energy project, it could be an investment in a more stable future for Montenegro. Energy independence is not a luxury, but a strategic need for every country. This project would ensure a stable supply of electricity, reduce dependence on imports and protect citizens from unpredictable price movements on international markets.
In the long term, domestic electricity production means safer and more affordable bills for everyone. The experiences of European countries such as Norway, Switzerland and Austria show that hydroelectric power plants, when planned and implemented with high environmental standards, not only ensure energy stability, but also help regulate water flows and reduce the risk of extreme weather conditions. At this stage, the priority is to finalize all necessary studies, including the Environmental Impact Assessment Study, which has been submitted to the Environmental Protection Agency. We expect the Agency to issue its position in the second half of 2025, after all technical and environmental aspects have been analyzed in detail. If the agency's position is that construction should not be carried out, we will certainly not go against the opinion of the relevant institution.
The plan is to store electricity from renewable sources in the Ironworks
How far have we come with the activities for the construction of battery electricity storage systems (BESS) produced from renewable sources and has the location, financing model or potential partners for the implementation of this project been determined?
EPCG is currently working on a study on BESS systems with its internal capacities. The idea is to install the first system with a power of 30MW and a storage capacity of 120MWh in the Steel Plant in order to use the existing energy infrastructure. In addition, a pilot project is planned to procure smaller battery systems for household customers, i.e. they will be offered to existing Solari project participants. I would like to take this opportunity to invite all interested parties who can participate and be partners in this project.
I believe in starting steel production at the Steelworks.
What are the next steps of the Ministry of Energy and the Electric Power Company with the Steel Plant after the termination of the contract with the Swiss investor? Do you believe that steel production can be resumed at the plant?
The management of EPCG is acting in accordance with the contract and we are monitoring the development of the situation. We cannot be satisfied with the current developments and we truly support all solutions that can be a way out of this situation. Of course, there is always the most important question, and that is the fate of the employees. When you ask if I believe in starting production, well, with a credible and investment-potent partner, I believe.
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