Montenegro and Italy negotiate construction of submarine power cable that would turn Montenegro into “energy hub”

The Government has adopted three draft agreements on the construction of a submarine power cable between Montenegro and Italy. The value of the project is estimated at EUR 760 million invested by the Italian partner Terna and EUR 100 million invested by the Montenegrin Transmission System (CES), with the Government of Montenegro retaining 50% of the shares. Minister of Economy Branko Vujovic expects that the cable should be laid in 2015, while the transmission line between Tivat and Pljevlja should be finished by no later than 2016.

Addressing the press after a Cabinet meeting on Thursday, October 7, Minister Vujovic specified that the first agreement would define the transaction of shares through the capital increase of CES, which would make Terna the owner of a 22.09% stake in the Montenegrin company.

He reiterated that the investment would result in numerous benefits for Montenegro, including connecting its northern and southern regions, turning the country into an energy hub, total investment of the Italian company in Montenegro estimated at around EUR 200 million, expected increase in the shares prices, easier access to EU funds, possibility of attracting energy investors, and an expected budget income increase of Euro 10-40 million as a result of the power transit.

Minister Vujovic announced possible construction of transmission lines to Serbia and Bosnia and Herzegovina, which is still being negotiated, and which would enhance regional cooperation.