Montenegro’s renewable energy sector now includes a sufficiently broad pipeline of named projects to support a credible investment cycle. However, the country’s first solar auction demonstrated that a large project pipeline does not automatically translate into implementation readiness. The Ministry of Energy is redesigning the tender with support from the European Bank for Reconstruction and Development (EBRD) after all applications submitted in the initial 250 MW solar auction failed to satisfy the required legal and technical criteria. The shortcomings were primarily related to documentation, spatial-planning compliance and grid-connection requirements, rather than a lack of investor interest.
The revised auction framework remains a key pillar of Montenegro’s renewable energy strategy. Under the government’s 2026-2028 programme, auctions are planned for 450 MW of new renewable capacity, including 250 MW of solar and 200 MW of wind. Successful bidders will receive 12-year two-way Contracts for Difference (CfDs), a mechanism designed to reduce financing costs by providing greater revenue certainty. Nevertheless, the effectiveness of the scheme will depend on rigorous verification of land rights, permitting status and grid-connection conditions before projects are allowed to participate.
Beyond the auction programme, several major renewable projects continue to advance. Wind Europe MNE has launched the environmental screening process for the 92.4 MW Njegovudja wind farm near Zabljak, which will feature 14 turbines rated at 6.6 MW each, together with a new 110 kV grid connection. Meanwhile, the 88 MW Korita wind project near Bijelo Polje has secured a grid connection agreement with CGES and is expected to require approximately EUR 132 million in investment, with commercial operations targeted for 2030. The project previously faced delays after authorities refused a construction permit due to the absence of a connection agreement, highlighting how regulatory sequencing can significantly slow project development.
One of the strongest investment signals comes from the 50:50 joint venture between EPCG and Masdar, established to develop up to 2 GW of renewable generation and energy storage capacity. Its initial portfolio includes the 140 MW Stedim solar project and the 50 MW Krupac solar plant, alongside feasibility studies for more than 400 MW of pumped-storage hydropower. The inclusion of storage is particularly significant, as it will help balance increasing solar generation, reduce curtailment risks during periods of high production and shift electricity to higher-value demand periods while supporting exports through Montenegro’s electricity interconnection with Italy.
International developers are also expanding their presence in the market. French renewable energy company Qair has received a construction permit for the 50 MW Rudine solar plant near Niksic, which is expected to generate approximately 73 GWh of electricity annually. The company reports an additional 250 MW of projects that have already secured planning and technical approvals, together with another 70 MW currently progressing through the permitting process. Its cooperation with EPCG provides another pathway for renewable development outside the state auction system.
At the same time, Montenegro is strengthening its electricity transmission infrastructure to accommodate future renewable capacity. Grid operator CGES has secured a EUR 25 million loan from the French Development Agency (AFD), backed by a state guarantee, to modernise the 220/110 kV Perucica substation and upgrade the 400/220/110 kV Pljevlja 2 substation. The investment is also expected to receive an EUR 8.5 million grant from the European Union. The Perucica upgrade is designed to facilitate the integration of up to 350 MW of hydropower capacity, while improvements at Pljevlja 2 will reinforce Montenegro’s role within the Trans-Balkan Electricity Corridor and support the country’s long-term transition away from coal-fired generation.
Taken together, Montenegro’s growing portfolio of wind, solar and storage projects, combined with the EPCG-Masdar partnership and the planned auction programme, points to a renewable pipeline that already exceeds the country’s current electricity demand. This shifts the focus from project development alone to broader questions of grid integration, export capacity and system flexibility. Future investments cannot rely on identical assumptions regarding transmission availability, electricity prices or unrestricted dispatch. Financial institutions will increasingly require detailed assessments of location-specific curtailment risks, connection timelines, balancing costs and future network upgrades before providing project financing.
The distinction between wind and solar projects will become increasingly important as renewable capacity expands. Projects such as Njegovudja and Korita are expected to achieve higher capacity factors while delivering a larger share of electricity during winter months and night-time hours, giving them a different value within Montenegro’s power system. Solar projects, although generally quicker and less expensive to build, remain more vulnerable to declining wholesale prices during periods of high midday generation. As a result, Montenegro’s most resilient long-term energy portfolio will depend on a balanced combination of wind, solar, hydropower, pumped storage and battery systems operating under a coordinated transmission and dispatch strategy, rather than treating individual grid connections as isolated investments.
