EBRD Grants €28 Million Loan To Montenegro’s CGES For Major Substation Upgrade To Boost Renewable Energy

The European Bank for Reconstruction and Development (EBRD) has announced a sovereign-guaranteed loan of up to €28 million to Crnogorski Elektroprenosni Sistem (CGES) for the significant upgrade of the Brezna electrical substation in north-western Montenegro. This project, pivotal for the country’s energy future, will facilitate the integration of 400 MW of renewable energy into the national grid, aiding Montenegro in its efforts to decarbonize its economy.

The upgrade of the Brezna substation is expected to reduce transmission losses by 13 GWh annually and ensure a safe and reliable electricity supply, both within Montenegro and across the region. This enhancement will further fortify the Trans-Balkan corridor, which connects countries in the region to Italy and the European Union.

The project involves the installation of two power transformers, which will connect to the national transmission network via the new Lastva – Pljevlja transmission line. These transformers will elevate the facility’s capacity to 400/110 kV, enabling the connection of numerous renewable energy power plants currently under preliminary development by private entities.

The Brezna substation is a critical component of Montenegro’s electric transmission system, linking the 400 kV Cevo – Pljevlja 2 transmission line with the existing power grid to create a robust 400 kV ring. Additionally, this project lays the groundwork for a prospective power link to Sarajevo, an initiative supported by the EBRD that is in the initial planning stages.

To support the project, the European Union is providing a technical assistance grant of €1.05 million from the Western Balkans Investment Framework (WBIF). This grant will fund the development of a feasibility study, an environmental and social impact assessment, and preliminary design. Furthermore, the EBRD’s Shareholder Special Fund has contributed €90,000.

As part of the project, the EBRD and the EU will offer capacity-building opportunities and develop guidelines to enable regulators and other key local stakeholders to work effectively with CGES. This collaboration aims to create a level playing field for renewable energy in Montenegro’s electricity market.

The EBRD is also assisting CGES in obtaining a WBIF investment grant for this project, with a decision expected in December.

Since beginning operations in Montenegro in 2007, the EBRD has invested €846 million in 88 projects. The Bank’s priorities for the country include supporting private sector competitiveness, driving the green transition, and further integrating Montenegro into regional and global markets.