Economy Minister Kavarić's interview to Italian portal Agenzia Nova

Montenegro - Italy: Minister Kavaric confirms partnership on energy and announces new incentives

Montenegro confirms the strategic partnership in the energy sector with Italy and boosts cooperation in other areas with a new package of incentives. This is the message launched by the Minister of Economy of Montenegro, Vladimir Kavaric, in an interview with "Nova" during his recent visit to Rome, where he met among others the Minister of Economic Development, Federica Guidi. " Strategic partnership with Italy, initiated in the energy sector with A2a in EPCG and Terna in CGES, is going very well", said the minister, referring to the investments of the two Italian companies in Elektroprivreda Crne Gore (EPCG) and Crnogorski Elektroprenosni sistem (CGES). "Many challenges lie ahead, but I can say that we have the same vision. We expect to continue together all important projects", says the minister.

Kavaric explains that in its meetings he registred a particular interest in the cooperation in other sectors of the economy: "Montenegro is a country with a favorable climate for business and there are many untapped opportunities for Italian entrepreneurs. On this regard, we had a very positive meeting at Confindustria ". The minister also announced that the government is about to launch "a new set of incentives" aimed to "domestic and foreign investors who will be able to hire domestic labour force." More details, explains Kavaric, will be provided soon.

We asked Minister Kavaric about the coalition agreement between the Democratic Party of Socialists and the Social Democratic Party, the two partners of the government, that also includes the relationship with strategic partners, in particular with A2a, which owns 41.7 percent of EPCG. The Italian company is negotiating the way how to proceed with management of the local electric company. "Today EPCG is a better company than it was five years ago, but there is always room for improvement," says Kavaric. "At present - added the Minister - we are discussing the future with both A2a that with our government partners. It is encouraging that we all agree on the fact that EPCG should be able to generate profits, pay its debts, replenish citizens and industries, and especially invest in the energy resources of Montenegro. We are discussing details, projects and programs: I think we will find a common language on the priorities. "

The minister resizes the maritime border dispute between Croatia and Montenegro in the Prevlaka area, that according to studies made in the 80’s could be rich in hydrocarbons. "The border issue with Croatia is totally irrelevant concerning our tender exploration of oil and gas, which refers to an area in the southern part of our country. I think the issue related to the border with Croatia will be solved without blocking the exploration and exploitation of hydrocarbons from both sides. We communicate often with our neighbors at the level of government, Foreign and Economy ministry”, says Kavaric.

Montenegro has recently closed a tender for the exploration of oil and gas along its coasts. The contract covers 13 blocks and an area of about 3 000 square kilometers. The tender was closed in May and six companies from the USA, Austria, Greece, Great Britain, Russia and Italy submitted three offers. One, out of these three bids, is submitted by consortium Eni S.p.A from Italy and Novatek from Russia. Minister Kavaric expects that the procedure of evaluating bids and selecting partners will be completed soon.

The Croatia-Montenegro dispute also involves the underwater cable Villanova-Tivat, a project carried out by Terna and considered strategic to transform the Balkan country into a energy "hub" in the Adriatic sea. "Terna communicates frequently with the Croatian side regarding to the laying of the submarine cable in their waters," says Minister of Montenegro. "As a partner of this project - adds Kavaric - we have very frequent communications with the Croatian Ministry Economy to solve the issue. We found understanding from the Croatian side and one of the routes proposed by Terna was approved. Considering the fact that there are still many technical issues to be determined, we will encourage further cooperation between Terna and Croatia. I emphasize that from Zagreb there was a very strong recognition of the strategic importance of this project at a regional level. "

Among the other energy projects currently under way from the Government of Podgorica, there is also the construction of the second block of the thermal power plant of Pljevlja. "We currently have three potential bidders, two Chinese companies and a Czech one," says the minister. "For EPCG - continues Kavaric - it is important that this project is based on the economic performances and that bids are viable in terms of expected results, costs and market prices, especially considering that the alterative of doing nothing is very costly. We believe that this power plant should be constructed for its economic potential and for the optimization of our energy portfolio. It is a good project for EPCG and we are discussing it with our partners A2a. I am optimistic about the fact that we will find an agreement. "

The executive of Podgorica finally decided to invest hundreds of millions of euros to build the highway Antivari (Bar) - Boljare, part of the so-called pan-european Corridor 11 (or 4b), a very expensive project because of the difficoult terrain. Standard & Poor's, however, reduced the rating on the long-term sovereign credit of Montenegro to B + from BB- with a stable out look, precisely because of the "high fiscal and external risks due to the government's plans to proceed with the construction motorway ". Minister Kavaric, for its part, ensures that the construction of the motorway will not affect other investments in the energy sector, that "so far have not been calculated in the budget of the government": the charges of this type of project, in fact, relies on investors.