Ministry of Finance and EBRD Sign Guarantee Agreement for Infrastructure Project in Montenegro

Minister of Finance Aleksandar Damjanović and Head of the European Bank for Reconstruction and Development (EBRD) in Montenegro Remon Zakaria signed a Guarantee Agreement between the two institutions for an amendment to the credit arrangement contract between Montenegrin Electrical Transmission System (CGES) and the EBRD. The amendment is aimed at financing the installation of a variable shunt reactor at the Lastva substation, with a total amount of up to 9 million euros. Executive Director of CGES Ivan Asanović signed the credit amendment on behalf of the company.

Given the liquidity and continuous positive results in CGES's operations, as well as the need to invest in the improvement of the electrical transmission network's safety – one of the pillars of the energy sector's development in Montenegro – Minister Damjanović emphasized that issuing a state guarantee for this credit arrangement is economically justified, as provided in the 2023 Budget Law and the accompanying Debt Issuance Decision.

Executive Director of CGES Ivan Asanović announced that expanding the Credit Agreement between CGES and the EBRD, originally signed in 2013 with the purpose of investing in the transmission network's quality and modernization, has laid the groundwork for finalizing the Lastva Substation Project. This expansion enables the accelerated procurement of the variable shunt reactor and connection, ensuring a permanent and secure operation of the electrical grid and interconnection with Italy.

Head of EBRD in Montenegro Remon Zakaria conveyed that this project is one of many successful collaborations the bank has undertaken with Montenegro. He expressed his expectations for the cooperation to be extended and intensified in all spheres where EBRD provides financial support.

The credit amendment signed today amounts to 9 million euros and defines the availability period of the funds until 15 November 2025. Additionally, it establishes a variable interest rate, in line with EBRD's standard terms, at six-month EURIBOR + 1%. The amendment also includes the option to choose a fixed interest rate, as defined in EBRD's Standard Terms.

This project marks an important step towards enhancing the safety and efficiency of the electrical transmission network in Montenegro, promoting further cooperation between the country and the EBRD. The Government and CGES, along with the support of the EBRD, are committed to driving sustainable development in the energy sector and fostering economic growth.