Privatisation Council discusses privatisation of Electric Power Industry of Montenegro (EPCG)

Podgorica, Montenegro (14 December 2017) -- At today's session, the Privatisation and Capital Projects Council, chaired by President of the Council and Prime Minister Duško Marković, discussed the Proposal for the Conclusion of Annex II of the Long-Term Lease Agreement between the Government of Montenegro and the consortium consisting of "Northstar "Doo Podgorica and Equest Capital Limited, Jersey, UK, and proposed to the Government to approve the Annex.

Under the agreement signed in 2009 and approved by the Parliament of Montenegro, the consortium, who was a sole bidder at the tender, leased land in the municipality of Herceg Novi, where it will be building a Ritz-Carlton hotel. Given that the contracting parties did not fulfil the obligations from the basic contract, the procedure for concluding Annex II of the agreement was initiated. The Annex does not change the initial conditions established by the tender, but the dynamics of the investment. Namely, in the first 5-year phase, a total of EUR 80 million will be invested in place of EUR 141 million, as it was set out in the basic agreement, while the total amount remains an obligation of the investor, as well as all other conditions regulated by the tender. The agreement stipulates that the lessee is obliged firstly to build a hotel within the resort.

The Council adopted the Information on the Privatisation Status of the Electric Power Industry of Montenegro (EPCG), stating that the partial EPCG privatisation procedure has not been completed because the A2A activated the put option in July 2017 and that previously sold shares of EPCG became state property. It was also noted that the Ministry of Economy is considering possible options that would accelerate the A2A's leaving the ownership structure of the EPCG in a way that will not unnecessarily burden public finances.

By the same token, discussions with several potential investors, that is, financial institutions, have been initiated, thus indicating the possibility of improving the position of the State and creating room for attracting foreign investments in the field of energy.

The Council tasked the Ministry of Economy to provide legal advice services to the State concerning the ongoing EPCG privatisation process.

PUBLIC RELATIONS SERVICE OF THE GOVERNMENT