Montenegro’s state-owned utility EPCG and UAE renewable-energy group Masdar are targeting 2027 for the possible start of construction on the first solar project developed through their new strategic partnership.
The timetable depends on completion of engineering, permitting, corporate structuring and financing work, meaning the project has not yet reached a final construction-ready stage.
EPCG and Masdar intend to hold 50% each in a new joint company that will develop projects included in their cooperation framework.
The partnership was formalised through a joint investment agreement in April 2026 and expanded in July through development agreements covering the Krupac and Stedim solar projects. A separate framework agreement also covers cooperation in hydropower.
The immediate corporate step is the signing of a shareholders’ agreement and formal establishment of the joint venture. EPCG and Masdar would then define individual project schedules and determine financing structures.
Funding is expected to be organised through the joint company and could include conventional project-finance structures or alternative financing models.
EPCG board president Milutin Djukanovic said the first solar development could enter construction in 2027, provided the remaining technical, administrative and financial work proceeds according to plan.
The cooperation sits within a broader government-to-government energy relationship between Montenegro and the United Arab Emirates. The two countries initiated an energy cooperation agreement in November 2025, which Montenegro’s parliament ratified in March 2026.
The significance of the partnership extends beyond the first solar plants.
EPCG and Masdar are also studying pumped-storage hydropower, which could provide balancing capacity and flexibility as Montenegro adds more intermittent solar generation.
The pairing of solar and storage is strategically important for EPCG because the company is seeking to diversify a generation portfolio still strongly influenced by hydrology and thermal production.
Additional solar capacity could improve Montenegro’s daytime electricity balance and reduce imports, but rapid expansion without flexible capacity would increase the challenge of managing production during high-output hours and supplying demand once solar generation falls.
Pumped storage could address part of that problem by shifting energy across the day while providing system-balancing services.
The partnership also gives EPCG access to Masdar’s project-development and operating expertise while retaining equal domestic ownership of the venture. Domestic engineers and specialists are expected to participate in development.
The 50:50 structure, potential use of project finance and inclusion of both renewable generation and storage make the EPCG-Masdar partnership materially broader than a straightforward equipment procurement arrangement. It is being structured as a platform capable of developing multiple Montenegrin electricity assets over time.
