Montenegro exclusive: TSO company CEO, 20 MEUR for power cable project in 2014

Published on 4. March 2014., SEE Energy News

We ended up the 2013th with a net gain of 2.7 MEUR while this year’s business plan anticipates a net profit of 7, 2 MEUR. According to the Law on budget, up to four million euros of CGES profit will be directed for electricity payment taken from the European interconnection, says CGES CEO Bulatovic.

Montenegrin transmission system company will invest 20 MEUR in 2014^thin underwater cable project from Montenegro to Italy, said CGES executive director Ivan Bulatovic. He added that the total CGES investment in the underwater cable project between Montenegro-Italy would exceed 100 MEUR.

– In the underwater cable construction, CGES will participate of about 20 percent in a total investment, therewith that the bulk of the funds would be provided through credit arrangements with the German Development Bank (KfW) and the European Bank for Reconstruction and Development (EBRD), said Bulatovic, adding he was satisfied with the cooperation with the Italian partner.

In general, the cooperation with the Italian partner TERNA who owns 22 percent of the CGES shares can be evaluated as quite satisfactorily, especially if we bear in mind that this is a partnership between one of the largest and smallest transmission system operators in Europe. In this regard, such cooperation faces many challenge which we, in my opinion, successfully overcome, considering all cultural and sociological differences in our environment, said Bulatovic.

Planned volume of investments in the construction of transmission line Pljevlja- Lastva Grbaljska and what dynamics it will be implemented, how much money will be spent this year for this purpose, and how much next year?

BULATOVIC:Montenegrin transmission system will invest 20 MEUR in underwater cable project in 2014th. The total investment, related to CGES, is divided into 3 parts-Lot: substation Lastva 400/110/35 kV, 2×300 MVA and transmission line 400 kV of Lastva-Cevo. The third lot is the construction of transmission lines on a section Cevo-Pljevlja. In terms of preparing documents, land acquisition and contractors selection, lots are in various implementation stages.

Relating to the first lot (constructionof TS Lastva) planned funds that will be invested in this year are 4.3 MEUR and 4.4MEUR in 2015^th. I will remind you, in the previous year it had been expropriated the land, signed a contract with the contractor and paid in advance, in the current year it is expected the substation design and preliminary work on the site. For this purpose the CGES in the past hasspent about 12MEURfor the expropriation process and the advance payment.

Another lot envisages the construction of two transmission lines DV 400 and 2×400 kV Lustra – Cevo. Funds planned for 2014^th are 5.5 MEUR and 7 MEUR for 2015^th. The final activities of most convenient contract or choice and contract signing are underway. It is planned to complete the expropriation process this year, preparation of project documentation and the beginning of access roads construction.

Transmission line DV 400 kV Cevo – Pljevlja will be built within third part. For this purpose, this year’s planned resources are around 10MEUR, and in 2015^th about 12MEUR. The final phase of the expropriation process and tenders preparation for the contractor’ selection is underway. A contract signing with the selected contractor is expected in the third quarter of this year.

How do you generally assess the cooperation with Terna, which is a minority shareholder of CGES? Will the partnership project of underwater cable building be carried out in accordance with the stipulated time frame and on what funding model?

ANALITIKA: Please comment on the government’s decision that “taken” power supply for KAP needs be paid to the European interconnection through dividends from CGES profit?

BULATOVIC:It is a matter of major shareholder – the Government of Montenegro. The Budget Law provides funds of up to four million euros in CGES profit, by which it will be repaid the debt in accordance with the compensation program that has been accumulated in relation to the European Interconnection.

How much is the amount of projected investment in the rehabilitation of transmission and network infrastructure?

BULATOVIC:Given that excessive investment could result effect on existing loan arrangements, this year investment plan is quite corrected. According to the business plan from 2014^th to 2018^th, the investments in the maintenance of transmission network, substations and transmission lines, for this year are in the amount of eight million EUR, which I estimate that could provide a safe, comfortable and reliable operation of power system with investments from previous years.

Much of CGES was said and written during the past year. What are the financial results achieved in the previous 2013^thand what is the financial plan for the current year?

BULATOVIC:The previous year was one of the most complicated and difficult business year in CGES history. Because of the overall situation in which all energy entities in Montenegro have been found, in the end, we must be satisfied with business results because despite all reserved resources on the basis of unpaid claims, we ended up the 2013^thwith a net gain of 2, 7 MEUR. For 2014^thbusiness plan foresees a net profit of 7, 2 MEUR.

Source; Serbia Energy See Desk