Montenegro is preparing an approximately €50 million energy-transition programme for Pljevlja, focused on renewable heating, district-heating expansion and household energy efficiency as the coal-dependent municipality plans for a lower-carbon economy. The proposed Montenegro Just Energy Transition (M-JET) project could be implemented over about five years.
Preliminary allocations include around €24 million for a renewable heat-production facility, €20 million for expanding Pljevlja’s district-heating network, €5 million for household energy-efficiency and cleaner-heating measures, and about €1 million for technical assistance, supervision and implementation. The financing structure has not yet been finalised. Montenegro is considering a World Bank loan, potentially combined with grants from the Western Balkans Investment Framework, which could cover up to 30% of eligible investment costs.
A project-preparation grant of approximately $2 million-$2.5 million is also under consideration. Preparation could begin in 2027, with feasibility studies, environmental and social assessments and technical documentation continuing into 2028. The programme is centred on Pljevlja because the town is at the heart of Montenegro’s coal industry and hosts the country’s only thermal power plant. The Pljevlja power plant, operated by state utility EPCG, remains an important component of the national electricity system and is also among Montenegro’s largest sources of carbon emissions.
The municipality is consequently expected to face significant economic and employment challenges as Montenegro aligns its energy sector with EU climate policy. Expanding district heating could reduce local reliance on individual coal- and wood-fired heating while improving air quality. A renewable heat source combined with an expanded municipal network could also reduce household energy costs and create demand for engineering, construction, heating equipment and energy services.
The preliminary programme could generate procurement opportunities for feasibility and design consultants before larger construction tenders are launched. Potential participants include environmental consultants, district-heating specialists, civil contractors, equipment manufacturers, supervision firms and energy-efficiency providers. The project remains at an early stage, with its final size, financing structure, procurement timetable and technical design dependent on World Bank appraisal, government approvals and grant financing availability.
M-JET would add a substantial investment pipeline to Montenegro’s energy transition, alongside recent investments focused on wind, solar and transmission infrastructure. The programme would direct additional funding towards the social and municipal impacts of the transition away from coal, alongside changes in the electricity sector.
