Chances increase for departure of A2A from EPCG

Government’s negotiations with representatives of Italian company A2A regarding the partnership in state-owned power enterprise EPCG are still ongoing, but the agreement on continuation of cooperation is not even in sight. 

Fourth delay of the negotiation didn’t bring anything new. Italians remained at the same position as earlier, as well as representatives of the Government of Montenegro, so it’s almost certain that A2A will not prolong the partnership, it was said to Pobjeda newspaper from multiple sources, portal CdM reported. The deadline for agreement officially expired at the end of July. Considering that an agreement couldn’t be reached for the third time, final decision was postponed for two months. Negotiations are actively ongoing, according to a report by Dnevne novine newspaper, but A2A company doesn’t want to accept conditions of Montenegrin government related to the investments in EPCG.

Government of Montenegro still claims that second block of Pljevlja thermal power plant is the priority, that EPCG can finance the construction on its own because it has a significant amount of free assets, and that it could also get a loan arrangement. However, A2A disagrees, emphasizing that a third partner should be found for the project. Majority owner of EPCG is the state with 57,02% while the Italian company has 41,75%.

As the situation is now, there are three offers towards Italians. First and least probable option is the agreement on management and a new five year contract. This means that the second block of thermal power plant in Pljevlja would be built form the resources of EPCG. Second option is for the management contract not to be signed, so A2A would keep its shares, but not the right to decision making. In this case the power plant’s new block would still be built. Third option, probably the most realistic one, is the sale of A2A’s shares, but according to contracts, shares would have to be offered to government of Montenegro first.