Montenegro’s state-owned power utility Elektroprivreda Crne Gore (EPCG) and Abu Dhabi-based clean-energy developer Masdar have signed a package of implementation agreements that establish the framework for developing a large-scale renewable energy portfolio in Montenegro.
The agreements move the cooperation between the two companies from a memorandum of intent announced earlier in the year into the project implementation phase. The partnership is based on a previously established 50:50 joint venture between EPCG and Masdar, which is planned to develop up to 2 GW of renewable energy capacity across solar, wind, hydropower, battery energy storage and hybrid technologies. The initial project pipeline includes 190 MW of photovoltaic capacity and provides a framework for further development of pumped-storage hydropower facilities with a combined capacity of more than 400 MW. The first phase of the cooperation focuses on two photovoltaic projects.
The Štedim solar project is planned with approximately 140 MW of installed capacity, while the Krupac solar project is expected to add around 50 MW. Together, the projects represent one of Montenegro’s largest coordinated solar investment programmes. The developments are intended to expand Montenegro’s renewable electricity generation base and serve as the first implementation stage of the EPCG–Masdar joint venture.
Alongside solar developments, EPCG and Masdar signed a framework agreement covering the assessment and potential development of pumped-storage hydropower projects exceeding 400 MW in combined capacity. The planned storage facilities are designed to support renewable energy integration by storing electricity during periods of higher renewable production and making it available during periods of increased demand. The inclusion of energy storage expands the scope of the partnership beyond electricity generation projects and creates a portfolio combining renewable production with system flexibility services.
The renewable energy platform is also connected to Montenegro’s electricity export potential through the existing high-voltage submarine electricity interconnector between Montenegro and Italy. The infrastructure provides access to the Italian electricity market and creates opportunities for additional renewable generation supported by storage capacity to serve markets beyond domestic consumption.
EPCG seeks diversification amid financial pressures
The partnership comes as EPCG reported a €92.1 million net loss, influenced by weaker hydrological conditions, higher electricity import costs and the temporary shutdown related to reconstruction works at the Pljevlja thermal power plant. The expansion of renewable generation through cooperation with Masdar is expected to support EPCG’s diversification of generation capacity and reduce long-term dependence on electricity imports during periods of unfavourable hydrological conditions.
Masdar provides renewable energy development experience
Masdar contributes experience in developing, financing, constructing and operating renewable energy projects internationally. The company’s activities include utility-scale solar, offshore and onshore wind, battery storage, hybrid energy systems and other renewable technologies. Through the joint venture, EPCG gains access to international technical expertise related to renewable infrastructure development and project financing structures.
Investment programme expected to require significant capital
Although the partners have not disclosed detailed capital expenditure estimates, the planned renewable portfolio approaching 2 GW, together with utility-scale storage projects, represents an investment programme valued in the hundreds of millions of euros, with potential capital requirements reaching several billion euros over the programme’s lifetime. The scale of the programme highlights the role of international partnerships in financing Montenegro’s energy transition.
The integration of additional renewable generation capacity will require improvements in grid infrastructure, including transmission upgrades, modern dispatch systems, forecasting capabilities and advanced system operation. Coordination with Montenegro’s transmission system operator CGES will be required as the country expands renewable generation and strengthens regional electricity connections.
Renewable expansion supports EU climate and energy objectives
The projects are aligned with Montenegro’s efforts to expand renewable energy capacity and support European Union climate and energy objectives. Increasing renewable electricity production is expected to contribute to decarbonisation goals, reduce exposure to future carbon-related regulatory costs and support industrial competitiveness as European supply chains increasingly consider carbon intensity. Projects expected to create wider economic activity Beyond electricity generation, the renewable energy developments are expected to create demand for engineering services, construction companies, electrical equipment suppliers, environmental consultants and specialised maintenance providers.
The construction and operation of the projects will support employment, regional economic activity and the development of technical capabilities connected with future infrastructure projects. The EPCG–Masdar agreements also include challenges related to environmental approvals, land acquisition, permitting procedures and grid connections. Pumped-storage developments require additional engineering, hydrological and environmental assessments before investment decisions can be finalised.
