Montenegro’s state-owned electricity company Elektroprivreda Crne Gore (EPCG) has submitted a request for government approval of a €64.22 million long-term loan to finance a portfolio of ten renewable energy projects with a combined installed capacity of 95.87 MWp and expected annual electricity production of 124,518 MWh.
The planned financing is intended to support EPCG’s renewable energy investment programme and increase domestic electricity generation from renewable sources.
Solar Projects Form Core of Investment Programme
The financing package covers several photovoltaic projects, including the Solari 5000+ programme, the SE Željezara solar project, solar installations at the Vrtac, Slano and Krupac dams, the Kapino Polje L1, L2, B1 and B2 solar plants, and the first phase of the Krupac 47 project.
The projects are designed to expand Montenegro’s renewable electricity capacity, strengthen energy security and support national decarbonisation targets.
Financial Projections Show Positive Investment Indicators
According to EPCG’s submitted financial projections, the projects could generate approximately €20.7 million in annual revenue during their first full year of operation. The portfolio is expected to produce around €20 million in EBITDA, with a projected internal rate of return (IRR) of 30.44% and a net present value (NPV) of approximately €196.2 million. The estimated payback period is 3.29 years. Debt repayment indicators include a projected debt service coverage ratio (DSCR) of 2.21 and a loan life coverage ratio (LLCR) of 2.47.
Financing Planned Without State Guarantee
EPCG stated that the proposed borrowing would not require a state guarantee, with repayment expected to be supported by project operating revenues and the company’s regular business activities. The utility has already invested approximately €18.9 million of its own funds into the project portfolio and said the new financing would improve liquidity by partially reimbursing those initial investments. Under the Solari 5000+ programme, approximately 90% of the investment value is expected to be recovered from participating customers, reducing EPCG’s direct financial exposure.
EPCG Reports Stronger First Quarter Results
Updated financial data for the first quarter of 2026 showed improved performance at EPCG. The company reported a net profit of approximately €38.5 million and EBITDA of around €45.8 million during the period. The results represent a recovery following challenges in 2025, when extended maintenance at the Pljevlja Thermal Power Plant and unfavourable hydrological conditions negatively affected EPCG’s financial performance.
Ministry of Finance Reviews Borrowing Proposal
The Ministry of Finance assessed that the renewable energy projects represent commercially viable green investments capable of generating sufficient cash flow to service their own debt. At the same time, the ministry highlighted the importance of liquidity management and careful investment planning as EPCG enters a period of increased capital requirements. Following an assessment of EPCG’s updated financial results, the ministry concluded that the government could continue considering approval of the proposed borrowing.
Renewable Portfolio Expands Energy Transition Strategy
The proposed financing represents another stage in EPCG’s renewable investment programme. Together with ongoing hydropower modernisation activities and previous renewable energy initiatives, the new portfolio reflects a shift toward distributed solar generation and diversified renewable assets. The projects are expected to contribute to reducing electricity imports, strengthening energy resilience and supporting Montenegro’s alignment with the European Union’s long-term energy transition objectives.
