The European Bank for Reconstruction and Development (EBRD) is increasing its support in response to the economic impact of the coronavirus pandemic in Montenegro. The investment bank decided to provide a 50 million euros senior loan, approved under its coronavirus Solidarity Package for Elektroprivreda Crne Gore (EPCG), to Montenegro’s main electricity provider to support the company in absorbing the challenges presented by the COVID-19 crisis.
The loan will help to ensure the stability and resilience of the country’s energy provision while simultaneously protecting the achievements made by the Montenegrin energy sector in its ambitious clean growth and decarbonisation agenda, reads the EBRD’s press statement.
“As a responsible company, through this financing, we want to safeguard our operations and ensure the sustainability of our planned investments,” said Branislav Pejovic, CFO of EPCG.
“In light of ongoing uncertainty, the management will monitor the economic situation carefully and will draw on funds made available as required. Being part of the EBRD Solidarity Package is important and yet another demonstration of EPCG as a strong and trusted partner,” Mr Branislav emphasised.
The EBRD has previously provided a loan of 32 million euros to EPCG – and its distribution subsidiary Crnogorski Elektrodistributivni Sistem (CEDIS) – for the instalment of smart meters throughout the power distribution grid for domestic consumers. The programme resulted in Montenegro becoming a regional leader in smart meter deployment and the first EBRD economy to meet the EU target for smart meter coverage.
To date, more than 80 per cent of customers in Montenegro already have smart metres, which translates into over 86,000 tonnes of CO2 savings per year. EPCG now aims to reach 85 per cent by the end of this year, while also targeting the development of 300 megawatts (MW) of wind and solar generating capacity in the coming years.
“We have worked with EPCG for many years, supporting its transition to a modern, commercially oriented utility operating a smart network,” commented Harry Boyd-Carpenter, Director of EBRD Energy for EMEA region.
“We’re very pleased to have the opportunity now to provide short-term support to ensure their resilience in the face of COVID-19 impacts and in particular sustain the momentum of Montenegro’s accelerating green transition,” he concluded.
In the wake of the coronavirus pandemic and its economic impact, the EBRD stepped up by adopting a comprehensive series of response and recovery measures that strengthen the Bank’s Solidarity Package, unveiled on 13 March. The Bank now stands ready to provide support worth 21 billion euros over the 2020-21 period.
Montenegro is also a candidate country to the EU since 2010 and a contracting party to the Energy Community Treaty. Thus the country has committed to adopting EU principles and strategic priorities and obliged to gradually adapt its legislation to the EU’s energy, environment and climate acquis.
The green transition will play a central role in the recovery to relaunch and modernise the economies of the Western Balkans, however, the dire effects of the pandemic risk to shift the focus from speeding up this transition. Scaling up financial instruments will be crucial to maintaining hard-won progress towards sustainable economies in the region.