Montenegrin Deputy Prime Minister Vujica Lazovic issued a decision on declassification of information on the result of negotiations between the State of Montenegro and Italian company A2A regarding the power utility EPCG. New agreement includes several items: both Montenegro and Italy have waived the arbitration rights, EPCG will issue a guarantee for TPP Pljevlja and A2A will have an exit option, where the state has to purchase its stake in EPCG.
According to the declassified information, in the event of circumstances affects the implementation of the new agreement, namely the obstruction of the process of decision-making regarding the implementation of the project for the construction of second unit at TPP Pljevlja by 31 December 2016, the value of an exit option by which the Government takes over A2A’s stake in EPCG is 250 million euros in seven annual installments.
A precondition for a conclusion of a new agreement is a waiver of arbitration which may arise from the interim agreement and the waiver of the arbitration under the new shareholders agreement if exit option is activated. New shareholders agreement would be valid until 31 December 2016.
A2A will continue to manage the power utility EPCG on the basis of similar conditions that were prescribed in the previous contract. It will have the right to submit key manager positions and it will have the right to sell its shares to a third party after the state waives its right of first refusal.
EPCG will issue a corporate guarantee to the Czech Exim Bank for the project of the construction of second unit at TPP Pljevlja. Last year, the Government selected the offer of Czech company Skoda Praha as the best on public tender for the construction of the second unit at TPP Pljevlja. Skoda Praha offered to build 254 MW unit for 338.5 million euros, and to secure a loan for 85 % of the required investment. The loan for the construction will be provided by the Czech Exim Bank, which previously argued that special purpose vehicle (SPV) company established by the Montenegrin Government and A2A was not good enough guarantee for such large investment and insisted that the guarantee for the loan should be either the Montenegrin Government or the power utility EPCG.
A2A currently holds 41.7 % stake in EPCG, while Montenegrin Government owns 57 % of the share capital. In 2009, the company paid 435 million euros for its stake in EPCG, transmits Serbia-energy.eu
