Elektroprivreda Crne Gore (EPCG), the state-controlled utility in Montenegro, has initiated a request to secure up to €64.22 million in long-term financing aimed at supporting ten renewable energy projects, which collectively boast a capacity of 95.87 MWp.
The proposed projects encompass several solar initiatives, including Solari 5000+, solar installations located at Željezara Nikšić, as well as developments at the Vrtac, Slano, and Krupac dams, and ongoing work at Kapino Polje and the initial phase of Krupac 47. The anticipated annual energy production from these projects is estimated to be around 124,518 MWh. To date, EPCG has allocated approximately €18.9 million from its own funds towards these initiatives.
Details regarding potential lenders or mandated arrangers have not been disclosed, indicating that this proposal should be viewed as part of a financing pipeline rather than a finalized transaction.
The management case submitted by EPCG forecasts first-year revenues of about €20.7 million, with projected EBITDA of around €20 million. The internal rate of return is calculated at 30.44%, while the net present value stands at €196.2 million. Key financial metrics include a payback period of 3.29 years, a debt-service coverage ratio of 2.21, and a loan-life coverage ratio of 2.47.
The expected revenue from these projects appears to surpass typical returns associated with unhedged wholesale solar generation. The financing structure may incorporate elements such as customer repayments, self-consumption benefits, or other contractual payments linked to distributed solar installations. Future lenders will need to differentiate between merchant electricity revenue and cash flows from customer financing and corporate operations.
