Concession agreements for construction of ten small hydro power plants in Montenegro awarded

Podgorica, Montenegro (2 June 2014) – Montenegro’s Economy Minister Vladimir Kavarić awarded earlier today the concessions agreements for the construction of ten small hydro power plants on six watercourses in Montenegro to representatives of the following five consortiums:

- "Hydro Bistrica", for the construction of a small hydro power plants on the river Bistrica;
- "Plava Hydro Power", for the construction of two small hydro power plants on the River Đurička;
- "Interenergo", for the construction of two small hydro power plants on the River Vermica;
- "Hydro Power Montenegro", for the construction of a small hydropower plant on the Kaludarska River;
-"Kutska and Mojanska", for the construction of four small hydropower plants on the rivers Kutska and Mojanska.

The agreements provide for the construction of ten small hydro power plants with total installed capacity of 23,324 MW and projected annual production of 86.289 GWh. Based on the accepted conceptual ideas, the total investment amounts to EUR 46,632,972.00.

"By constructing the small hydro-power plants, Montenegro meets its European obligations and receives extra electricity which can be exported. It will be of crucial importance especially following the construction of the underwater energy cable between Montenegro and Italy," Minister Kavarić told the press following the awarding ceremony.

He added that renewable energy sources are the most environmentally friendly and the cheapest sources, and, very importantly, they reduce the need for the electricity import. Furthermore, having in mind that most of the hydro-power plants are located in Montenegro’s underdeveloped areas, these projects will make a significant contribution to economic development through the construction of transport and energy infrastructure.

The concession agreements provides for rules for project design, construction, operation and maintenance of the small hydro power plants.

"The tender rules have been innovated and simplified. Technical solutions for getting a network connection have been pre-defined and prerequisites for developing the necessary spatial planning documents have been created as well. Also, the criteria have been simplified - the concession fee is fixed at 6.5% of revenue for all facilities and the standard concession contract along with the tender has been offered beforehand, thus contributing to investors’ security," the Economy Minister underlined.

The concession agreements were signed in April and May 2014, on the basis of the public tender the Ministry of Economy announced on 12 July 2013 and the tender initiated by bidders on 22 November 2013.