As consortium Hydro Bistrica, concessionaire for the construction of small hydropower facilities on Bistrica river, reached an agreement with the European Bank for Reconstruction and Development (EBRD) about additional financing, the Government of Montenegro approved the contract for a loan of EUR 6 million. The concession contract from April 2014 enables the construction of one electricity generating unit with the capacity of 3.5 MW on the tributary of Ljuboviđa in the vicinity on Bijelo Polje in the country’s north. Planned annual production is 11,32 GWh. The second phase, of 24 months, in the implementation of the contract, started in March last year, when the construction permit was issued.
Hydro Bistrica, registered in Podgorica, is the project company. The consortium consists of Synergy, also based in the Montenegrin capital, Vodni Zdroje from Prague, Czech Republic, Triangle GC ING from Peć, Kosovo*, and Gradnja, Bijelo Polje. The Ministry of Economy said EBRD, the lender, asked for guarantees that legislation related to renewable energy sources will be respected during loan repayment. The statement adds the ministry participated in talks to help the concessionaire satisfy conditions for financing. The state didn’t take up any financial obligations while the draft contract was agreed on in accordance to existing regulation, according to the document.
The additional contract is tripartite, in line with the practice in project financing, but the state didn’t acquire any rights or obligations in financing, the ministry said. In the case that the consortium is responsible for a potential termination of the contract, the creditor can exercise its step-in right and suggest to the government that another company enters the project. The state guarantees for the obligations of power market operator COTEE, which it founded and which makes agreements with privileged producers.
The first hydropower plant on Bistrica was launched in 1936. It was renewed after World War Two and shut down in mid-1970s.
* This designation is without prejudice to positions on status and is in line with UNSCR 1244/99 and the ICJ Opinion on the Kosovo declaration of independence.
July 11, 2022
