Montenegrin transmission operator CGES has signed a €25 million state-guaranteed loan with France’s AFD on 29 July. The financing is aimed at modernising the Perućica and Pljevlja 2 substations. A further €8.5 million EU grant is planned through the Western Balkans Investment Framework .
Substation works linked to hydropower integration
The reconstruction of the 220/110 kV Perućica substation is intended to support the integration of up to 350 MW of hydropower capacity. At the 400/220/110 kV Pljevlja 2 facility, works are set to strengthen Montenegro’s connection to the Trans-Balkan Electricity Corridor. The project also aims to prepare the northern network for a gradual reduction in coal dependence .
The sequencing of network reinforcement ahead of generation commissioning is described as financially useful. Montenegro has solar, wind, storage and hydropower development ambitions that exceed current domestic peak demand. Strengthening substations and transmission paths before associated generation comes online is intended to reduce curtailment and connection-delay risk.
AFD first energy-sector investment and financing structure
AFD is making its first energy-sector investment in Montenegro, following technical preparation by RTE International. The package combines concessional debt with an EU grant and a sovereign guarantee. This structure is expected to deliver a lower financing cost than CGES could obtain through an unsupported commercial loan .
The investment is also tied to the value of the Italy–Montenegro submarine interconnector. New generation in northern and central Montenegro can earn higher export revenue only if electricity can reach the coastal converter station without being constrained by internal network limits.
CGES network footprint and shareholder structure
CGES operates 1,512 kilometres of transmission lines and 29 substations. The state holds 55.4%, while Italy’s Terna holds 22.1%. Serbia’s Elektromreža Srbije holds 15%.
This shareholder structure is described as aligned with Montenegro’s cross-border trading position. The company’s ownership split reflects participation from Montenegro, Italy and Serbia in its transmission role .
