The tender for selecting a contractor for the fabrication, delivery, installation, and commissioning of the A8 generator set for the Perućica hydroelectric power plant attracted two bids from prominent European contenders: a joint consortium of “Voith Hydro GmbH & Co KG” (Austria), Končar (Zagreb), and Elnos (Belgrade), alongside “Litostroj Power” from Ljubljana.

This information was officially disclosed to “Vijesti” by the Electric Power Company of Montenegro (EPCG), confirming that the bid submission deadline was June 12th of this year.

The state-owned energy company anticipates signing a contract with the selected contractor this fall, with plans to commission the generator by 2027.

With the installation of the A8 unit, the installed capacity of the “Perućica” HPP will rise from the current 307 MW to 365.5 MW, thereby enhancing its production capacity and operational readiness throughout the year.

The investment is expected to add approximately 50 GWh per year to the electricity system, funded through a loan obtained from the German Development Bank (KFW).

The addition of the eighth unit is part of EPCG’s broader strategy to green its production portfolio and promote decarbonization in the electricity sector.

“The tender process adheres to the procurement guidelines set by the German Development Bank (KfW). As this is a one-stage procedure with three envelopes, the evaluation is conducted in phases: first, qualification documents are assessed, followed by a review of the technical offer exclusively for qualified bidders. Financial offers are then reviewed only after the technical evaluation. This evaluation process maintains a 50:50 weighting ratio between the technical and financial components. We expect the evaluation’s completion, bank approval, and contract signing to occur in the fall,” EPCG explained.

The company assured that the installation of the A8 generator will be meticulously coordinated with the ongoing operations of the existing hydroelectric plant, minimizing disruption to its routine operations.

“Current projections indicate that the generator commissioning is scheduled for 2027. However, the final completion timeline could be influenced by various factors, such as the international market situation and global impacts on equipment delivery schedules. We anticipate signing the construction contract in the fall, and the project is moving into its final preparation stages, with optimism about adhering to the planned timelines. Special thanks go to the KfW Bank team, led by Pablo Obrador Alvarez, whose efforts were essential in securing the European Commission’s backing for this project,” EPCG stated.

On September 6, 2024, EPCG and KFW formalized a loan agreement amounting to 40 million euros for the installation of the A8 generator, as part of Phase III of the Perućica HPP Reconstruction and Expansion Project.

“The funds will be allocated to cover all project-related expenses, adhering to the procedures and stipulations outlined in the Agreement. The loan was secured through a new financial instrument stemming from the cooperation between the European Commission and KfW – the EFSD+ guarantee (European Fund for Sustainable Development Plus). This guarantee represents a significant innovation within the regional context. Established in 2021 under the EU Development and International Cooperation Instrument (NDICI – Global Europe), EFSD+ aims to bolster sustainable development and economic growth in partner nations. Alongside this initiative, the EU and KfW launched a “Support Programme for Market-Oriented Green Transformation in the WB6 Regions,” which seeks to facilitate the green transition for public and private energy companies across six Western Balkan countries, including Montenegro. The program encompasses both financial and technical support for investments in renewable energy sources and modernizing network infrastructure,” explained EPCG.

Moreover, EPCG will also obtain technical support as part of the project to further advance its green and market-oriented transformation.

“Based on the Contribution Agreement signed on November 28, 2024, between the European Union, represented by the European Commission, and KfW, and with a commitment to uphold human rights, applicable environmental regulations, multilateral environmental agreements, and internationally recognized labor standards, EPCG and KfW have established a Grant Agreement for consulting services aimed at supporting EPCG’s market-oriented green transformation, totaling 1,500,000 euros. The Grant Agreement was signed on June 13, 2025,” EPCG stated.

The state-owned company noted that the eighth unit will feature a nominal capacity of 58.5 MW, increasing the total installed capacity of the Perućica HPP from 307 MW to 365.5 MW.

“Simultaneously, the maximum flow through the power plant will expand from 68 m³/s to 80.75 m³/s. Anticipated annual production, following system optimization, is projected to reach up to 50 GWh. Considering the designed head and flow rates, a double Pelton turbine is planned for installation, compatible with existing units A6 and A7. The scope of work for the reconstruction and modernization of the Perućica HPP within the installation of the A8 unit includes the design, procurement, and installation of electromechanical equipment (including the turbine, generator, excitation system, protection, high-voltage equipment, and more), as well as construction works on the supply and discharge systems. The power plant supply system, machine hall, and 110 kV switchgear were originally designed according to the final construction phase plan for the Perućica HPP, which anticipated the installation of an additional eighth unit along with the existing seven. The future A8 unit will be connected to the third pipeline along with units A6 and A7. This pipeline is designed to handle a total flow of 3 x 12.75 m³/s, allowing for the simultaneous operation of all three units – A6, A7, and the proposed A8 – at a flow rate of 12.75 m³/s each,” EPCG added.

“Voith” executed the reconstruction of the A5, A6, and A7 generators

The loan repayment period signed by EPCG with KfW spans 15 years, inclusive of a five-year grace period.

This represents the third and final loan provided by KfW for the modernization of the HPP “Perućica,” with total investments in the collaborative arrangements for this facility, including this contract, exceeding 83 million euros.

The reconstruction and modernization project for HPP “Perućica” – Phase II, conducted in partnership with “Voith Austria,” encompasses the reconstruction and modernization of aggregates A5, A6, and A7, along with partial renovations of aggregates A1 to A4 as well as domestic aggregates.

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