The European Bank for Reconstruction and Development (EBRD) has announced a sovereign-guaranteed loan of up to €28 million to Crnogorski Elektroprenosni Sistem (CGES) for the upgrade of the Brezna electrical substation in northwestern Montenegro. This project will integrate 400 MW of renewable energy into the national grid, supporting Montenegro's decarbonization efforts.
The Brezna substation upgrade is expected to reduce transmission losses by 13 GWh annually and ensure a reliable electricity supply within Montenegro and the region. The project will also strengthen the Trans-Balkan corridor, which connects the region to Italy and the European Union.
The upgrade involves installing two power transformers, connecting to the national transmission network via the new Lastva – Pljevlja transmission line. This will elevate the facility's capacity to 400/110 kV, enabling the connection of several renewable energy power plants under preliminary development by private entities.
“The Brezna substation is a critical component of Montenegro's electric transmission system, linking the 400 kV Cevo – Pljevlja 2 transmission line with the existing power grid to create a robust 400 kV ring,” the EBRD stated.
The project is also laying the groundwork for a potential power link to Sarajevo, an initiative supported by the EBRD that is in the initial planning stages. To support the project, the European Union is providing a technical assistance grant of €1.05 million from the Western Balkans Investment Framework (WBIF). This grant will fund a feasibility study, an environmental and social impact assessment, and preliminary design. Additionally, the EBRD's Shareholder Special Fund has contributed €90,000.
The EBRD and the EU will offer capacity-building opportunities and develop guidelines to help regulators and other local stakeholders work effectively with CGES. This collaboration aims to create a level playing field for renewable energy in Montenegro's electricity market.
The EBRD is also assisting CGES in obtaining a WBIF investment grant for this project, with a decision expected in December.
Since starting operations in Montenegro in 2007, the EBRD has invested €846 million in 88 projects. The Bank's priorities for the country include supporting private sector competitiveness, driving the green transition, and further integrating Montenegro into regional and global markets.
