The European Bank for Reconstruction and Development (EBRD) has announced a sovereign-guaranteed loan of up to €28 million ($30.5 million) to TSO Crnogorski Elektroprenosni Sistem (CGES). The funds will be used to upgrade the electrical substation Brezna located in north-western Montenegro.
This project is a critical step towards integrating 400MW of renewable energy into the national grid, supporting Montenegro’s efforts to decarbonise its economy. Additionally, the upgrade is expected to reduce transmission losses by 13GWh/year, ensuring a safe and reliable electricity supply not only in Montenegro but also across the region. The project will further strengthen the Trans-Balkan corridor, a vital link connecting countries in the region to Italy and the EU.
The planned works include the installation of two power transformers, which will be connected to the national transmission network via the new Lastva – Pljevlja transmission line. Once completed, the facility’s capacity will increase to 400/110kV, enabling the connection of renewable energy power plants currently under preliminary development by private entities with the Brezna substation.
The Brezna substation plays a pivotal role in the Montenegrin electric transmission system by linking the 400kV Cevo – Pljevlja 2 transmission line with the country’s existing power grid to form a 400kV ring. This upgrade also lays the foundation for a potential power link to Sarajevo, an initiative that is being supported by the EBRD and is in the early planning stages.
The project is backed by the European Union, which is providing a technical assistance grant of €1.05 million ($1.14 million) from the Western Balkans Investment Framework (WBIF). This grant will be used to develop the feasibility study, an environmental and social impact assessment, and the preliminary design. Additionally, the EBRD’s Shareholder Special Fund has contributed €90,000 ($98,000) to the project.
As part of the initiative, the EBRD and the EU will offer capacity building opportunities and create guidelines to help regulators and other key stakeholders in Montenegro work effectively with CGES. This will ensure that the electricity market in Montenegro is a level playing field for renewable energy. The EBRD is also assisting CGES in obtaining a WBIF investment grant for the project, with a decision expected in December.
Since commencing operations in Montenegro in 2007, the EBRD has invested €846 million ($921.1 million) in 88 projects. The Bank’s priorities for Montenegro include supporting private sector competitiveness, promoting the green transition, and enhancing the country’s integration into regional and global markets.
