Montenegrin transmission operator CGES signed a €25 million state-guaranteed loan with France’s AFD on 29 July to modernise the Perućica and Pljevlja 2 substations. A further €8.5 million EU grant is planned through the Western Balkans Investment Framework.
The reconstruction of the 220/110 kV Perućica substation is intended to enable the integration of as much as 350 MW of hydropower capacity. Work at the 400/220/110 kV Pljevlja 2 facility will reinforce Montenegro’s connection to the Trans-Balkan Electricity Corridor and prepare the northern network for a gradual reduction in coal dependence.
The sequencing is financially useful. Montenegro has accumulated solar, wind, storage and hydropower development ambitions that substantially exceed current domestic peak demand. Strengthening substations and transmission paths before the associated generation is commissioned reduces curtailment and connection-delay risk.
AFD is making its first energy-sector investment in Montenegro, following technical preparation by RTE International. The combination of concessional debt, an EU grant and a sovereign guarantee should produce a lower financing cost than CGES could achieve through an unsupported commercial loan.
The investment also protects the value of the Italy–Montenegro submarine interconnector. New generation in northern and central Montenegro can earn higher export revenue only if electricity can reach the coastal converter station without being trapped behind internal constraints.
CGES operates 1,512 kilometres of transmission lines and 29 substations. The state owns 55.4 per cent, Italy’s Terna 22.1 per cent and Serbia’s Elektromreža Srbije 15 per cent, giving the company a shareholder structure aligned with Montenegro’s cross-border trading position.
