Rehabilitation and Repair

EPCG, German Development Bank to finance new unit at 307 MW Perućica plant

The addition of an eighth unit will increase the nominal capacity of Montenegro’s oldest large power plant from 307 MW to 365.5 MW.

EPCG, German Development Bank to finance new unit at 307 MW Perućica plant
Perućica Hydroelectric Plant (Credit: EPCG)

EPCG and German Development Bank (KfW) signed a loan agreement worth €40 million (US$44 million) aimed at financing the installation of the A8 turbine-generator unit at the Perućica Hydroelectric Plant in Montenegro, as part of the third phase of the reconstruction and expansion project of the 307 MW hydroelectric facility.

The existing intake system, machine hall and 110-kV substation can support the final phase of  the Perućica construction, which includes the installation of the eighth unit with an installed capacity of 58.5 MW, EPCG said. This will increase the nominal capacity of Montenegro’s oldest large power plant from 307 MW to 365.5 MW. The plant currently has a potential annual production of about 1,300 GWh.

The future A8 unit, together with units A6 and A7, is planned to be connected to the third pressure pipeline, which is designed to handle a full flow of 3 x 12.75 m³/s. The commissioning of the eighth unit is planned for 2027, EPCG said.

The loan has been secured through a new instrument resulting from collaboration between the European Commission and KfW, the EFSD+ guarantee (European Fund for Sustainable Development Plus). The loan repayment period is 15 years, with a five-year grace period.

“This is the last of three loans that the KfW has provided for the modernization of Perućica, and the investments within the framework of joint arrangements for this plant, including this contract, exceed €83 million ($91.5 million), which indicates a serious level of cooperation, especially considering the progress in terms of the EFSD+ guarantees,” said KfW Director for Southeast Europe and Turkey Pablo Obrador.

In addition to financial support in the form of loan funds, EPCG will also receive technical support for activities related to its transition into a “green, market-oriented” company. The international tender for selecting the contractor for the production, delivery, installation, and commissioning of the A8 unit will be announced this October.