Elektroprivreda (EPCG) is in one of the most intensive development and investment cycles, the goal of which is for Montenegro to produce more of its own electricity, be less dependent and strengthen the security of the electricity system in the long term, announced the Chairman of the Board of Directors of the company, Milutin Đukanović.
He stated that the cumulative result of 22,34 million euros for the period from 2021 to last year, liquid assets of 39,6 million, new production capacities, capital reduction due to decisions from the previous period, and solar assets and programs demonstrate the development logic of EPCG's business.
"A portion of the available funds has been converted into power plants, equipment, energy infrastructure and investments that create long-term value. In energy, the strength of the system is not measured only by the cash balance at a given moment, but also by the value of assets, production capacities and the company's ability to produce more energy from its own sources in the coming years," Đukanović said in a statement.
He added that EPCG's new production capacities already provide approximately 330 GWh of electricity per year, and that the Solari 3000+/500+ and 5000+ projects have so far produced more than 203 GWh of electricity and covered more than ten thousand users, while the Gvozd I wind farm (WP) is operating in a trial mode, with a planned transition to commercial operation.
"Development continues through new solar projects, Gvozd 2 wind farm, modernization of hydropower plants, installation of A8 generators in Perućica, battery systems for energy storage, valorization of hydropower potential and strategic partnerships. The essence of all these projects is clear: each new domestic MWh reduces the need for imports, increases the company's resilience to market disruptions and strengthens security of supply," said Đukanović.
He stated that the cumulative business result of EPCG Solar Gradnja for the period from 2021 to last year is around -4,62 million euros, while the internal model of the broader social benefit of the program estimates the total effect at approximately 50,78 million.
"This model is not EPCG's accounting profit, but rather the broader energy, consumer, tax and CO2 effect of the project," said Đukanović.
He reminded that EPCG ended last year with a loss of 92,12 million euros.
"This is a serious annual result and I have no intention of relativizing it. At the same time, energy and financial data clearly show the dominant cause of the negative result," said Đukanović, adding that this is a consequence of the deterioration of the energy balance, imports and stock market purchases, and wage costs.
He said that this is not a justification of the loss, but rather a precise business explanation.
"When the largest base production facility is unavailable for months, and the hydrological situation is unfavorable at the same time, the missing energy must be purchased on the market. That is precisely why EPCG's strategic response is to increase its own production, diversify sources, and increase system flexibility," said Đukanović.
He recalled that one of the most significant business decisions the company made related to the transition to a market relationship with the Aluminum Plant (KAP) as of January 1, 2022.
"According to EPCG's internal analyses, the business relationship with KAP in the period 2017-2021 produced approximately 50,3 million euros of negative effect, while the change in the business model is estimated to have prevented at least 178,08 million additional losses compared to the alternative scenario," said Đukanović.
The essence of that decision, as he explained, was not the creation of any guaranteed annual profit, but the removal of significant non-market risk from EPCG's operations.
Đukanović stated that this is precisely what responsible management is all about - recognizing risk, measuring its possible effect, and timely adapting the business model to the company's interests.
"When we took over the company in 2021, liquid assets at the end of the previous year amounted to approximately 39,6 million euros. At the same time, from 2020 to 2025, EPCG's total assets increased by approximately 171 million, and fixed assets by approximately 242 million," said Đukanović.
He added that part of the capital was converted into production and infrastructure assets.
"This does not diminish the importance of liquidity, which must be the subject of responsible management, but it clearly shows why the account balance and the total value of the company are not in the same category," Đukanović said.
He also reminded that the loan from the German Development Bank (KfW) of 40 million euros for the A8 aggregate, as well as 30 million refinancing of existing debt, are obligations that are being repaid.
"These are not budgetary grants to the company. The assessment of such arrangements must include the purpose, price, maturity and future cash flow of the investment being financed," said Đukanović.
He recalled that the purchase price of the former Steel Plant's assets was 20 million euros, while EPCG documentation contains estimates of the assets' value of approximately 48,7 to 52,46 million.
"The special value of the location is represented by two 110/35 kV transformer stations with a capacity of 63 MVA each, which represent significant infrastructure for the development of solar power plants and battery systems for energy storage. Therefore, the value of this investment cannot be reduced only to the short-term result of the operating company," Đukanović said.
According to him, for EPCG, the value of the acquired assets, the existing energy infrastructure and the possibility of its inclusion in the company's future production portfolio are relevant.
He also reminded that the ecological reconstruction of the Pljevlja Thermal Power Plant began before the current management's term, and that after the takeover, the contracted project was continued and brought to completion.
"RACI and CETI measurements show values within the prescribed limits. In addition to the environmental result, in the observed period after the reconstruction, production of 432,274 GWh was achieved compared to the planned 381 GWh, or 113 percent of the plan," said Đukanović.
He added that CBAM is a separate European regulatory challenge relating to carbon pricing and embedded CO2 emissions.
"This is not a penalty for not meeting SO2 or NOx standards. That is why the development of renewable sources, energy storage and hydro-flexibility is not only a matter of green transition, but also of the future market competitiveness of EPCG," said Đukanović.
He said that EPCG manages the largest and most important energy system in Montenegro, which implies continuous making of business, investment and development decisions.
"Their quality is not determined by their number, but by their legal basis, financial effect and benefit to the company. As the Chairman of the Board of Directors, I believe that it is our obligation to talk about results through verifiable indicators - financial reports, energy production, asset value, realized investments and measurable effects of business decisions," said Đukanović.
He added that energy is not managed from quarter to quarter, but that power plants, hydroelectric facilities, substations, battery systems and other energy infrastructure are built to create value for decades.
"The decisions we make today will determine the production capacity of EPCG and the energy position of Montenegro long after the end of one business cycle. The direction of our company is clear: increase domestic production, reduce dependence on imports, modernize existing capacities and create new energy assets," said Đukanović.
He said that EPCG faces new projects and challenges, but that the goal remains the same - a stronger company, more domestic electricity and a more secure energy system in Montenegro.
"It is our obligation to ensure that EPCG works - because when EPCG works, Montenegro works too," concluded Đukanović.
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