Montenegro’s state-owned utility EPCG and UAE renewable-energy group Masdar are targeting 2027 for the possible start of construction on their first solar project under a new strategic partnership. The timeline is linked to completion of engineering, permitting, corporate structuring and financing work, and the project has not yet reached a final construction-ready stage.
EPCG and Masdar plan to hold 50% each in a new joint company responsible for developing projects included in their cooperation framework. The partnership was formalised through a joint investment agreement in April 2026 and expanded in July via development agreements covering the Krupac and Stedim solar projects.
Joint venture formation, scheduling and financing
The next corporate step involves signing a shareholders’ agreement and formally establishing the joint venture. After that, EPCG and Masdar would set individual project schedules and determine financing structures for each development.
Funding is expected to be organised through the joint company. It could involve conventional project-finance structures or alternative financing models as the projects progress from early-stage work toward construction.
EPCG board president Milutin Djukanovic said the first solar development could move into construction in 2027 if remaining technical, administrative and financial tasks proceed as planned. The timetable therefore remains conditional on work that is still under way.
Government-to-government energy framework with UAE
The cooperation is part of a broader government-to-government energy relationship between Montenegro and the United Arab Emirates. An energy cooperation agreement was initiated in November 2025 and ratified by Montenegro’s parliament in March 2026.
The partnership also includes hydropower cooperation under a separate framework agreement alongside the solar development plans. EPCG and Masdar are additionally studying pumped-storage hydropower as Montenegro adds more intermittent solar generation.
Pumped storage alongside solar generation
EPCG’s interest in pumped storage relates to providing balancing capacity and flexibility as additional solar output comes online. The company is seeking to diversify its generation portfolio, which remains strongly influenced by hydrology and thermal production.
More solar capacity could improve Montenegro’s daytime electricity balance and reduce imports, but rapid expansion without flexible capacity would increase operational challenges during high-output hours. It would also affect how demand is supplied once solar generation declines.
Pumped storage could address part of this issue by shifting energy across the day while providing system-balancing services. The pairing of solar generation with storage is therefore reflected in the scope being studied within the EPCG-Masdar cooperation framework.
Domestic participation and platform approach
The partnership provides EPCG access to Masdar’s project-development and operating expertise while maintaining equal domestic ownership of the venture at 50:50. Domestic engineers and specialists are expected to participate in development activities across the planned projects.
The structure is designed as a platform capable of developing multiple Montenegrin electricity assets over time rather than a single equipment procurement arrangement. It combines renewable generation with potential storage elements, including pumped-storage hydropower studies, within the same joint-company setup .
