Cooperation with Czech Skoda Praha on construction of Block II of TPP Pljevlja terminated

Podgorica, Montenegro (27 December 2017) - Steering Committee of the Project of Construction of Block II of the Thermal Power Plant Pljevlja decided to terminate the cooperation on this project with the Czech company Skoda Praha, the press conference, which took place earlier this afternoon at the Government's building, stated.

At its 55th session of 21 December 2017, the Government of Montenegro reviewed and accepted the Information on the status of activities for the Implementation of the Project of Construction of Block II of the Thermal Power Plant Pljevlja and the Project of Environmental Reconstruction of Blok I of TPP Pljevlja. On that occasion, the Government tasked the Ministry of Economy to send the necessary instructions to the Electric Power Industry of Montenegro and the Steering Committee of the project made decisions on these matters.

Ivan Mrvaljević, Executive Manager of the Directorate for Development and Engineering at the Electric Power Industry of Montenegro (EPCG), said that the reason for the termination of the cooperation is the Skoda Praha's impossibility to carry out the project under the contract, that is, the fact that even a year after the withdrawal of the Czech Export Bank, the partner did not provide a viable project financing model. Despite significant efforts made by both negotiating teams in the past period, no agreement has been reached on the satisfactory structure for the implementation of the project.

"Certainly, the Steering Committee's decision does not mean that the Electric Power Industry of Montenegro is abandoning the implementation of the project. EPCG remains fully committed to the construction of the Block II of the TPP Pljevlja and, it will, as quickly as possible, by the end of January 2018, propose to the Ministry of Economy and the Government of Montenegro an alternative solution for carrying out the project," Mrvaljević stressed.

He in particular emphasised that the Steering Committee and the EPCG reached a decision on the implementation of the ecological reconstruction project of the existing Block I.

In his words, the existing Block I of the TPP Pljevlja will be ecologically reconstructed by 2021. The scope of the project includes the desulphurisation system, the denitrification system, the modern wastewater system, the reconstruction of the existing ash and slag transportation system, the improvement of the operation of electrolytic power facilities.

"The reconstruction will be done in full compliance with the strictest European environmental standards envisaged by the Decision adopted by the European Union on 31 July 2017 and its estimated value is about EUR 40 million," Mrvaljević said, adding that, in parallel with the ecological reconstruction of the Block I and in cooperation with the Government and the local community, the Pljevlja heating system project with the existing Block I as a thermal source will be implemented.

"When it comes to the citizens, in relation to the previous plans, nothing will change, and these two important projects will significantly contribute to the improvement of the ecological situation in Pljevlja," Ivan Mrvaljevic of the EPCG concluded.

Economy Minister Dragica Sekulić informed the public about the reasons why the Government of Montenegro decided to end the cooperation with the Czech company Skoda Praha.

"It is our duty and responsibility to provide citizens of Montenegro with safe supply. Our obligation is to ensure the safe operation of the Thermal Power Plant in Pljevlja and it is our obligation to start with the environmental reconstruction of the Block I of the TPP Pljevlja as quickly as possible," Minsitar Sekulić emphasised.

She recalled that in the past year the Government tried to find the best alternative solution in cooperation with the Skoda Praha in relation to what were originally signed contracts, but unfortunately it failed to do that. Therefore, it was decided to start the ecological reconstruction of the Block I, implement the heating system project for town Pljevlja and to find an alternative solution for the additional electricity source in Pljevlja within a very short period.

"Due to the proposal and the request we have sent to the Steering Committee, the safety of electricity supply and the work of the TPP Pljevlja will not jeopardise the functioning of the electro-energy system. On the contrary, we are keeping the facility that we have, we are keeping the installed power that we have, which gives us the opportunity to have additional electricity and energy source," said the Minister of Economy.

Minister of Sustainable Development and Tourism Pavle Radulović presented the impact of this decision on the ecological situation in Pljevlja.

According to the Energy Community's approval, the TPP Pljevlja has the license to operate another 20,000 working hours from 1 January 2018 to 31 December 2023, Minister Radulović explained.

He pointed out that after the reconstruction, the Block I of TPP Pljevlja will be meeting all the strictest ecological standards of the European Union.

When it comes to the ecological situation in Pljevlja, Minister Radulović noted that it is bad, noting that it was often presented much worse than it actually is, but he is hopeful that it will significantly improve even before the completion of the reconstruction of the Block I.

"I would like to underscore that there were comments that we will use coal for the TPP Pljevlja, as the Paris Agreement excludes the use of coal. No, the Paris Agreement does not exclude the use of coal, but approves the technologies that make the coal use acceptable, that is, keep them within the limits defined by European standards," Minister Radulović concluded.

PUBLIC RELATIONS SERVICE OF THE GOVERNMENT OF MONTENEGRO