Parliament of Montenegro adopts Annex of EPCG management contract

The Parliament of Montenegro adopted the Annex of the shareholders’ agreement between the Government and Italian company A2A concerning the management of Electric Power Company of Montenegro (EPCG).

The Annex extended the contract on EPCG management until June 30 this year, after the shareholders’ agreement previously expired on December 31, 2016. The decision was published on the Parliament’s website.

The previously signed agreement established the pre-emption right, which implies that A2A is obliged to inform the government about its potential intention to sell shares, with clear information about the buyer and the transaction’s conditions. The state will exercise the option if it is not satisfied with the buyer.

In the event of circumstances affecting the implementation of the new agreement or termination of the agreement, the value of the exit option by which the government takes the Italian partner’s stake in EPCG is EUR 250 million, payable in seven annual installments.

The Government of Montenegro and A2A had disagreements over the management of EPCG. The bone of contention has been the construction of block 2 of thermal power plant Pljevlja, which was eventually agreed upon. That deal was made between the government and A2A in June last year.

A2A bought 44 percent of shares in EPCG for EUR 430 million in 2009.