The Montenegrin Government has approved a major financing package for state-owned utility EPCG, combining investment in hydropower modernization with measures to stabilize its financial position. The plan includes both a long-term infrastructure loan and a separate arrangement aimed at restructuring existing liabilities.
A 40 million euros credit line from KfW will support the third phase of upgrades at the Perućica hydropower plant, including the installation of a new generating unit (A8). Additional works involve refurbishing water channels and modernizing turbines, steps expected to boost efficiency and extend the plant’s operational lifespan.
The loan is structured over ten and a half years, including a five-year grace period, with interest based on a fixed margin plus the applicable swap rate. Officials noted that the investment is part of a broader strategy to strengthen generation capacity and ensure reliable long-term electricity output. It is also expected to enhance system flexibility, supporting better integration of renewable energy into the national grid.
In parallel, the Government approved an additional 30 million euros financing arrangement to refinance short-term obligations accumulated in 2025. These liabilities were largely driven by electricity imports during outages at the Pljevlja thermal power plant and periods of low hydropower production.
Authorities stressed that this second loan does not represent new net debt, but rather a restructuring of existing commitments, meaning the overall financial exposure of EPCG remains unchanged while improving its short-term liquidity position.
