Elektroprivreda Crne Gore (EPCG), Montenegro’s state-owned power utility, has submitted a request for government approval to secure a long-term loan of up to €64.22 million. This funding is intended to support a series of ten renewable energy projects, highlighting EPCG’s commitment as the leading investor in the country’s energy transition. The projects will have a combined installed capacity of 95.87 MWp and are projected to generate approximately 124,518 MWh of electricity annually.
The proposed investment portfolio encompasses several initiatives, including the Solari 5000+ programme, the SE Željezara solar project, and photovoltaic installations at the Vrtac, Slano, and Krupac dams. Additionally, it includes solar plants at Kapino Polje L1, L2, B1, and B2, as well as the first phase of the Krupac 47 project. Collectively, these developments aim to bolster domestic renewable electricity production, enhance energy security in Montenegro, and advance national decarbonisation efforts.
Financial forecasts accompanying the application suggest that these projects could yield around €20.7 million in annual revenue during their first full operational year, alongside an estimated EBITDA of approximately €20 million. EPCG anticipates an internal rate of return (IRR) of 30.44%, with a net present value (NPV) close to €196.2 million and a payback period of 3.29 years. The debt service coverage ratio (DSCR) is projected at 2.21, while the loan life coverage ratio (LLCR) stands at 2.47, indicating that cash flows from the projects should adequately support debt obligations.
EPCG has indicated that this financing will not necessitate a state guarantee; rather, it expects that the projects will be financed through their operating cash flows and regular business activities. The company has already invested approximately €18.9 million of its own capital into these initiatives and believes that the new financing will enhance liquidity by partially recouping those initial investments. Notably, for the Solari 5000+ programme, around 90% of the investment value is expected to be recovered from customer participation, thereby minimizing EPCG’s credit exposure.
Recent financial data for Q1 2026 has further strengthened EPCG’s investment rationale. The company reported a net profit of approximately €38.5 million and an EBITDA of around €45.8 million, reflecting a rebound from challenges faced in 2025 due to extended maintenance at the Pljevlja Thermal Power Plant and adverse hydrological conditions impacting financial results.
The Ministry of Finance in Montenegro has recognized that these projects represent commercially viable green investments capable of self-financing their debt obligations. However, it has also emphasized the necessity for prudent liquidity management and careful planning as EPCG embarks on a more capital-intensive investment phase. Following its assessment of the updated financial performance, the ministry has concluded that the government can proceed with considering approval for the proposed borrowing.
This financing proposal marks a significant advancement in EPCG’s renewable investment strategy. Alongside ongoing hydropower modernization and prior investment efforts, this new portfolio reflects a strategic pivot towards distributed solar generation and diversified renewable resources. This approach positions Montenegro to decrease electricity imports, enhance energy resilience, and better align with long-term energy transition goals set by the European Union.
