Montenegro’s government has referred proposed management changes at state-controlled electricity utility EPCG to the Finance Ministry for financial assessment, delaying the creation of additional executive positions and amendments to management responsibilities, including electricity trading.
Energy Minister said the government withheld its participation in the shareholder meeting because the proposed changes required further financial evaluation. The October 27 shareholders’ meeting could not proceed after the government failed to appoint a representative. The state holds 98.63% of EPCG, making its participation decisive for shareholder decisions.
The proposed restructuring includes three additional deputy director positions, changes to remuneration policy and amendments to the distribution of management authority over electricity trading. No official estimate of the additional annual management costs has been disclosed, while the Finance Ministry’s assessment remains pending.
Management Expansion and Financial Implications
The proposed changes come as EPCG manages an expanding portfolio covering thermal and hydropower generation, electricity trading, renewable-energy development and investments in solar power, wind generation, battery storage and the modernisation of existing facilities.
The additional executive positions would create recurring financial obligations, including salaries, bonuses, benefits and administrative support. Their justification therefore depends on whether the expanded management structure would improve operational coordination and decision-making without creating overlapping responsibilities.
EPCG’s growing investment requirements make the issue particularly relevant. Montenegro needs additional renewable generation and storage capacity, alongside network improvements, while decisions also remain necessary concerning future investment in the Pljevlja thermal power plant. Management expenditure consequently needs to be considered alongside the company’s requirements for capital investment and maintenance.
Electricity Trading Authority Under Review
Changes to electricity-trading responsibilities represent a particularly important part of the proposed restructuring. EPCG operates in regional electricity markets where hydrological conditions, thermal generation availability, cross-border transmission capacity and hourly price movements directly affect commercial performance.
When domestic production is insufficient, the company may need to purchase substantial electricity volumes from neighbouring markets. During periods of stronger hydropower generation or surplus production, it can sell electricity abroad. The authority to approve and execute these transactions therefore carries significant financial exposure. Any redistribution of electricity-trading powers requires clearly defined delegation limits, internal controls and accountability mechanisms. Approval thresholds are particularly important when large electricity volumes are traded in markets where prices can change substantially within hours.
State Ownership and Corporate Governance
The delayed shareholder meeting also highlights the relationship between EPCG and its controlling shareholder. With the government holding 98.63% of the company, major corporate decisions depend heavily on coordination within state institutions. The absence of a government representative prevented the meeting from proceeding, demonstrating how incomplete administrative or financial assessments can interrupt formal corporate decision-making.
The Finance Ministry’s review could provide a clearer basis for evaluating the proposed positions, remuneration arrangements and distribution of executive authority before the matter returns to shareholders. For minority investors, transparency over management appointments, associated costs and the division of responsibilities between the board, executive management and state shareholder remains important.
EU Governance Requirements
The restructuring debate also comes as Montenegro prepares for EU membership, with increasing attention to corporate governance, state aid, procurement and financial discipline at state-owned enterprises. EU alignment does not require the privatisation of strategically important utilities, but it increases expectations that publicly controlled companies operate under transparent commercial arrangements.
Appointments and remuneration structures must therefore be justified by operational requirements and supported by clear financial assessments. EPCG is central to Montenegro’s electricity security, represents one of the country’s most valuable state-controlled assets and is expected to play a major role in the energy transition. Its governance arrangements have direct implications for investment execution, electricity trading and financial performance.
The proposed restructuring remains subject to the Finance Ministry’s opinion. If the changes are considered financially justified, they could return to shareholders with a clearer assessment of their costs. Otherwise, EPCG may need to revise the proposed management structure. The provisions concerning electricity-trading authority may require separate examination, regardless of the final decision on additional executive positions.
