Montenegro: A2A & Gov extend JV agreement on power utility EPCG

20. August 2015. / SEE Energy News

Representatives of A2A and the Montenegrin Government agreed to extend the two-month partnership agreement in Electric Power Industry of Montenegro EPCG, which has been in force since 2009th, announced in the Italian company.

“This will allow the continuation of negotiations on the partnership extension, based on the agreed basic principles”, writes in the statement 2A.

This is the fourth extension of the deadline for reaching agreement on future arrangements and the possible continuation of the partnership with the Italian partner in the Electric Power Industry.

The five-year contract and the Government of the Italian partner expired at the end of March this year. The negotiations that began late last year initially should have been completed by the end of March, but were extended until the end of June and then until July 31st.

Government and A2A do not have agreed positions on priority investments. Italians believe that the construction of the second unit of the thermal power plant in Pljevlja is not cost-effective now, on which the Government insists.

The project will cost at least 338 MEUR. It was expected from A2A to find a third partner to finance TPP, and Czech Skoda has been selected as equipment supplier.

Since Italians are not able to introduce a third partner to finance TPP, parallel were led negotiations on a possible exit of A2A from EPCG, but even an agreement on this version has not been reached yet.

They unsuccessfully tried to sell the stake in EPCG for which they cannot get even close to 430 MEUR, how much they pay the share in 2009th. The state has 57 percent of EPCG.

Among the A2A requirements are a guarantee of the invested capital profitability, autonomy in management and safety when it comes to the regulatory framework (the price), finding a third partner to finance thermal unit.

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