The Montenegrin Electricity Distribution System (CEDIS) has announced a substantial allocation of funds as part of its investment strategy to enhance the electricity distribution system, recognizing the critical need for a secure and high-quality power supply for users.

“In light of the current condition of the electricity distribution network, CEDIS aims to set increasingly higher standards for electricity delivery to end consumers,” the statement indicated.

CEDIS mentioned that the execution of the planned projects is anticipated to yield several beneficial outcomes – such as increasing capacity for new user connections, improving voltage conditions, enhancing reliability and supply security, and minimizing electricity losses.

“Due to preparatory efforts, we expect to initiate an intensive investment cycle in the electricity distribution network from now until 2029,” CEDIS stated.

The investment budget for this period is projected to exceed 250 million euros for capital investments, with approximately 121 million euros to be financed through loans on preferential terms, in collaboration with international financial institutions, including the European Bank for Reconstruction and Development, the World Bank, KfW Bank, and the French Development Agency (AFD).

“These four strategically vital investment projects focus on improving energy efficiency, modernizing infrastructure, and decarbonizing Montenegro’s power system,” added the statement.

CEDIS has taken a crucial step towards the digital transformation of its electricity distribution network, supported by a EUR 35 million loan from the European Bank for Reconstruction and Development (EBRD).

“This agreement will facilitate the implementation of advanced SCADA and ADMS systems, alongside the procurement of modern next-generation meters. The modernization includes the establishment of a SCADA system, allowing for real-time remote control and monitoring of the network, along with an ADMS system designed to optimize operations, respond quickly to incidents and outages, and enhance overall network management,” CEDIS elaborated.

In early December of last year, the World Bank Board of Directors sanctioned a project alongside a credit line of 21 million euros to support the decarbonization initiative within Montenegro’s energy sector.

“This initiative aims to replace seven 35 kV plants within 110/35 kV substations, along with old transformers with a transmission ratio of 35/10 kV, to be upgraded with new units that feature reduced losses in compliance with the ECO-Design of Transformers regulation’s second phase,” the statement detailed.

The loan agreement between the World Bank and the Ministry of Finance was finalized at the end of December last year, with the conditions for its effectiveness being fulfilled by February 14th.

“We are preparing technical specifications for the replacement of outdated transformers, with project initiation expected in the third quarter. The equipment set for replacement is in deteriorating condition, exacerbated by the prolonged demarcation process between CGES and CEDIS ongoing since 2009,” CEDIS stated.

Over the past two years, CEDIS has acquired 16 facilities from CGES at demarcation points in line with its legal obligations, thereby laying the groundwork for this project.

“The initiative to dismantle and replace old armored substations with new facilities, undertaken in cooperation with Germany’s KfW development bank, is valued at around 30 million euros and will be executed via a promotional loan with an EFSD+ guarantee. This effort is part of the European Union’s initiative to promote sustainable development and green technologies, focusing on the installation of new ECO DESIGN transformers that help lower energy losses during transmission, thus reducing operational costs and enhancing overall power system efficiency,” the statement continued.

Collaboration with the French Development Agency (AFD) has led to the launch of a project aimed at reconstructing six 35 kV power plants and replacing equipment in 250 10/0.4 kV substations, with an estimated budget of around 35 million euros. This project includes the reconstruction of 35 kV substations in Cetinje, Herceg Novi, and Danilovgrad, as well as 220/110/35 kV substations in Mojkovac and Podgorica 1, and 400/110/35 kV substations in Ribarevine.

“The reconstruction of these facilities is crucial for maintaining operational efficiency, long-term stability, and system security. Additionally, the growing number of users in residential areas amplifies the necessity for equipment modernization and substation upgrades,” CEDIS concluded.

Ultimately, CEDIS reaffirms its dedication to energy transition, providing a more dependable power supply to end-users, and aligning with European Union green policies through these initiatives.

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