Montenegro, Skoda Praha to ink deal on new TPP Pljevlja unit by end-April

By bne IntelliNews April 11, 2016

Montenegro’s government is expected to sign a deal with Czech company Skoda Praga for the construction of the second unit at the Pljevlja thermal power plant by the end of April, broadcaster RTCG reported on April 9, quoting Montenegrin deputy prime minister Vujica Lazovic.

The project is intended to extend the capacity of TE Pljevlja, which currently has only one unit of 210MW. However, the signing of the agreement with Skoda Prada was delayed for several months as the government and Italy's A2A - the joint owners of Montenegro's power monopoly EPCG, which owns TE Pljevlja.

Skoda Praha is the best ranked company in the tender for the construction of the 254MW Pljevlja second unit. The Czech company offered to build the unit with electrical efficiency of 39.5% for €338.5mn.

The contract was supposed to be signed by the end of last year, but the government and A2A initially failed to reach agreement. However, Lazovic said that the two partners have now reached an agreement on the project.

The contract between A2A and the government was signed back in 2009 after the Italian company acquired 43.7% of EPCG following a major privatisation deal. The Italian company paid €435mn. In the meantime, A2A has lost 2pp of its equity capital in EPCG, while the electricity price has been reduced, which resulted in A2A failing to meet pledged targets on issues such as investment.

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