Montenegro’s leading electricity companies are advancing plans for a collaborative energy-sector data centre in Nikšić. The initiative aims to transform part of the former Željezara industrial site into essential digital infrastructure, with the feasibility and design process now underway.
The state-owned power utility EPCG, along with transmission-system operator CGES and distribution company CEDIS, is set to jointly finance this project. A public call has been initiated to prepare a feasibility study and develop conceptual and technical documentation, which will outline the centre’s capacity, investment requirements, construction phases, and operational model.
This data centre is intended to centralize and safeguard the information technology infrastructure utilized across Montenegro’s electricity system. Additionally, it may create opportunities for external commercial clients, potentially expanding its function beyond an internal utility asset.
The importance of this project extends beyond standard IT investments, as electricity systems increasingly rely on digital infrastructure. This need arises from the integration of renewable energy sources, battery storage solutions, smart metering technology, automated substations, and complex cross-border trading mechanisms.
For EPCG, CGES, and CEDIS, ensuring data security and enhancing system resilience are becoming operational priorities akin to traditional power infrastructure. The proposed data centre could accommodate applications related to grid management, meter data processing, electricity trading, asset monitoring, and other vital systems.
CGES oversees Montenegro’s transmission network and international connections; CEDIS is responsible for the distribution system; while EPCG remains the principal generator and supplier of electricity in the country. Centralizing certain infrastructures could minimize redundancy and establish uniform standards for cybersecurity, backup strategies, and disaster recovery protocols.
A letter of intent was signed by the three companies in March 2025, marking a significant step towards making an investment decision following the strategic concept phase. However, a definitive capital expenditure figure has not yet been established; this will depend on whether the centre is tailored solely for electricity-sector needs or if it incorporates broader commercial hosting capabilities.
The demand for secure digital infrastructure in Montenegro is anticipated to grow as banks, public institutions, telecommunications firms, and private enterprises increasingly migrate their data to cloud-based systems. A domestic facility that meets high security and uptime standards could retain some of this demand within Montenegro rather than depending on data centres located elsewhere in Europe.
Nikšić presents several advantages as a potential site. The Željezara complex offers ample industrial space along with existing energy infrastructure that EPCG aims to repurpose for new economic activities. A reliable electricity supply is crucial for data centres; thus, situating the project within an energy-industrial complex could facilitate grid connections and future renewable energy integration more effectively than at a new urban site.
This initiative would also contribute to EPCG’s efforts to revitalize the former steelworks site. The company has explored various energy and industrial ventures at Željezara since its acquisition in order to transform it into a diversified energy production hub.
A data centre differs significantly from traditional heavy industry as it demands substantial power supply while requiring minimal physical raw materials. This characteristic aligns well with Montenegro’s broader shift towards digital services and lower-emission investments.
Nevertheless, energy consumption remains a critical consideration. Large data centres can necessitate continuous high electricity demand; thus efficiency in cooling design and power sourcing will be vital for project economics. Should the centre cater to commercial clients in the future, differentiating it through renewable electricity sourced from EPCG may become increasingly attractive as businesses strive to minimize their carbon footprints.
The project also raises important cybersecurity considerations. As digital control systems become integral to energy infrastructure management, disruptions can severely impact electricity supply and public services. A purpose-built facility could offer enhanced physical security measures compared to dispersed legacy IT setups.
However, centralization carries its own risks. The feasibility study will need to evaluate backup locations, independent power supplies, communication redundancies, and disaster recovery frameworks thoroughly.
Commercial viability poses another challenge. Given Montenegro’s relatively small market size, establishing a large data centre would likely require attracting regional or international customers to justify excess capacity. Factors such as competitive electricity rates, international fiber connectivity, low latency services, stringent data protection standards, and high service availability will be crucial for appealing to external users.
The current tender process aims to determine if these conditions can support a financially viable project. For the three utilities involved, the immediate rationale may focus more on operational efficiency rather than commercial gain as Montenegro’s electricity system evolves in complexity amid increasing EU integration demands for digital reporting and cybersecurity compliance.
A joint data centre could provide essential shared infrastructure during this transition while also offering potential for commercial expansion if supported by the feasibility study outcomes. If successful, the Željezara Nikšić site could play a pivotal role in Montenegro’s energy transformation by serving as both a power generation facility and critical digital infrastructure.
