Exposure to the Minister of Economics Dr. Vladimir Kavarić on a panel about energy in V economic conference of South East Europe, Berlin, 16 June 2011.

Ladies and gentlemen,

It is my great pleasure to give my cordial regards on behalf of the Montenegrin delegation and personally to the participants of 5th Economic Conference on South Eastern Europe. Strategic goal of the Government of Montenegro is fully-fledged EU and NATO membership. We have already achieved significant results within the process of European and Euro-Atlantic integrations. Montenegro obtained candidate status for EU membership last autumn.
As you already know, energy sector represents one of strategic branches of Montenegrin economy. Therefore, special attention is given to its development, reform activities in this sector and inclusion into regional and European energy market.
From the very beginning Montenegro has been supporting initiative of the European Union regarding the implementation of project on development of joint electricity and gas market in South-East Europe and its integration into the European energy market.
Objectives of Montenegro regarding the energy sector are in line with the objectives of the European Community, which are: increased safety in energy supply, attraction of investments, increased use of renewable energy sources, improved energy efficiency and development of market competition, together with improved environmental situation.
In accordance with the undertaken obligations, Montenegro has been implementing reform in the energy sector, from the legal and regulatory, as well as from the institutional and organizational aspect.
For the purpose of harmonizing the national legislation with the EU legislation, Energy Law and Energy Efficiency Law were adopted in April 2010.
Energy Law is in compliance with the EU Directives regarding the electricity and natural gas market, use of energy from renewable sources and cogeneration, safety in electricity and natural gas supply and provision of petroleum products reserves. Energy Efficiency Law is also harmonized with the most relevant EU directives on the energy efficiency. Certain bylaws prescribed by these laws have already been adopted, whilst the others are under preparation.
Energy Regulatory Agency has an important role in the development of Montenegrin energy sector. Since its founding in 2004, it has given a great contribution to the reforms in energy sector and liberalization of energy market. Montenegrin electricity market opened on 1 January 2009 to all consumers, save for the households, in accordance with the decision of the Energy Regulatory Agency.
At the beginning of March this year, the Government of Montenegro adopted the Energy Policy of Montenegro until 2030. It envisages for the Montenegrin energy system to develop in accordance with the goals and guidelines of the European Union and the Energy Community. One of main goals and priorities in the energy development of Montenegro is security in energy supply, which implies constant, secured, high quality and diversified energy supply for the purpose of balancing the supply with the consumers’ demands. Currently revision and innovation of the Energy Development Strategy is under way. It will define strategic commitments and ways for development of Montenegrin energy sector until 2030.
Following the development commitments, we have been intensively working so far on implementation of priority projects. These are projects on increasing the energy efficiency, revitalization and modernization of existing and construction of new energy facilities. Through their implementation we want to achieve reduction in electricity deficit, increased diversification of sources and security in energy supply.

In accordance with the strategic commitments and within planned projects, significant activities were implemented so far.
In 2009, project on partial privatization and capital increase of Elektoprivreda Crne Gore was implemented for the purpose of providing conditions for construction of new and revitalization and optimization of the existing power facilities and creation of long-term base for successful, profitable and competitive business operations of this energy company and secured electricity supply to citizens and economy.
With the aim of constructing the undersea interconnecting direct current cable between Montenegro and Italy and establishing strategic partnership between Crnogorski elektroprenosni system/ Montenegrin Transmission System AD/ and Italian company TERNA, agreements on implementation of this project were signed, worth over 850 million €. Also, capital increase of Crnogorski elektroprenosni system/ Montenegrin Transmission System AD/ system was implemented in the amount of approximately 22% of the total share capital so that the state remained as owner of 55% of shares.
Works on construction of 400kV power line Podgorica-Tirana were completed last autumn on Montenegrin territory. We expect that construction of power line in Albania is to be completed soon.
Completion of these projects will contribute to Montenegro in becoming energy hub in our region.
It is known that the region of South East Europe has significant electricity deficit and therefore it is necessary to commence with construction of new sources.
In that sense, for the purpose of valorization of available energy resources, Montenegro is also intensively working on implementation of projects on construction of new power facilities, which are:
- hydropower plant on Moraca and Komarnica,
- small hydropower plants on a number of small water streams,
- wind farms on Mozura and Krnovo locations.
We are also undertaking activities on valorization of other energy sources, such as coal, biomass and solar energy. We have in plan to restart Maoce project. The project envisages exploitation of coal in Maoce basin and construction of thermo-power plant of 500 MW total power.
Taking into consideration the estimation that Montenegro has significant reserves of oil and natural gas, we have in plan to commence soon with a project on exploration of oil and gas in the Montenegrin offshore area, in accordance with the Law on exploration and production of hydrocarbon, which was adopted in July last year.
I would like to mention that all our projects are being implemented in accordance with international standards, respecting the criteria of transparency and publicity, as well as the principle on sustainable development and environment protection.
Considering that Montenegro still does not have access to natural gas resources, neither developed gas infrastructure and gas market, I would like to emphasize our interest for the Project on construction of Ionian-Adriatic gas pipeline and readiness to get actively involved in its implementation.

Thank you for the attention