Montenegro Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in montenegro, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Energy
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Overview

The energy sector of Montenegro is small, with only 396,000 customers and overall demand of approximately 3,000 gigawatt hours (GWh) annually. Electricity production in Montenegro for 2024 totaled 3,447 GWh, a 15 percent decrease compared to 2023, largely due to unfavorable hydrological conditions. 

The Pljevlja coal-fired Thermal Power Plant as well as the Perucica and Piva Hydropower Plants account for the vast majority of total electricity production. The Pljevlja TPP, with an installed capacity of 225MW, is Montenegro’s only coal-fired plant and provides reliable baseload power. Since April 2025, the plant has been undergoing a major rehabilitation project to align with EU environmental standards, necessitating its full shutdown for six months. This has significantly increased Montenegro’s reliance on imported electricity at considerable cost to the state-owned electric utility. It remains unclear when the reconstruction effort will conclude and coal-based power generation will resume. 

The core activities of the majority state-owned Electrical Power Company of Montenegro (EPCG) are electricity generation, transmission, distribution, and supply. The Government of Montenegro currently owns 85.4% of EPCG’s shares after acquiring shares from its former strategic partner Italian company A2A in 2017. 

Montenegro has been a member of the Energy Community of Southeast Europe since January 2015, which opened its electricity market to competition. The country has significant potential for renewable energy development, as it uses only about 20 percent of its available hydro potential and has favorable conditions for solar and wind generation.  New proposed hydro projects have faced considerable opposition from local communities and environmental groups.  Increased investments in variable electricity generation will require significant upgrades to Montenegro’s transmission and distribution network.

The most important recent transmission system project was the construction of an underwater electricity cable to Italy, a $844 million investment completed in December 2019. The 433-kilometer-long tunnel, laid 1,200 meters under the Adriatic Sea, allows Montenegro to export and import electricity with the EU market.

Opportunities

In light of its stated plan to join the EU in 2028, Montenegro’s future energy development opportunities primarily align with EU obligations to reduce emissions, increase renewable generation, and improve energy efficiency. The government and EPCG continue to express interest in hydropower, solar, and wind projects, in line with its EU accession commitments. 

ECPG has conducted geotechnical research for the Komarnica hydropower plant, and a spatial plan for the project has been adopted, but environmental assessments remain pending. Komarnica would produce an estimated 210 GWh annually with 170 MW of installed generating capacity across two units with an estimated price tag of €264 million.  Similarly, the planned Kruševo HPP in Pluzine Municipality, with an expected generating capacity of 82 MW and annual output of 170 GWh, has an estimated budget of €160 million. EPCG signed a contract for project design with France’s EDF, with commissioning expected around 2027.
 

Montenegro has encouraged swift expansion of solar energy generation in recent years. With some of the highest solar radiation in Europe, especially in southern Montenegro (Bar and Ulcinj) and around Podgorica, the government is tendering state-owned land for 30-year leases to investors. In October 2018, a 250 MW solar project was awarded to a consortium of EPCG, Fortum, and Sterling & Wilson in Ulcinj, but the project has yet to be developed. EPCG also announced a 100MW land-based solar project and is separately exploring floating solar on reservoirs such as Slano Lake. 

Two wind farms in Montenegro - Krnovo, with a capacity of 72MWh, and Mozura, with a capacity of 46MWh - are currently operating in Montenegro. Several other wind projects remain under development. In June 2021, EPCG shareholders approved construction of the 55MW Gvozd wind farm with Austria’s Ivicom Holding with a project value of $61 million. In August 2020, the Montenegrin Government signed a contract for the construction of 70MW wind park on Brajici with German company WPD Windmanger worth $107 million. A larger 118 MW wind farm known as “Bijela” is also under development.

Montenegro intends to continue exploration of potential offshore oil and gas reserves. Initial exploratory drilling by the Italian-Russian consortium Eni/Novatek in 2021 did not yield commercially viable results, but the Government plans to issue a new tender for exploration in the near future. The 2014 Energy Development Strategy, the latest sector-wide approved strategy, suggested potential reserves of up to 7 billion barrels of oil and 425 billion cubic meters of natural gas, though further studies are needed to confirm these projections.  

Montenegro is also evaluating opportunities for LNG imports via a regassification facility at the Port of Bar and has expressed interest in developing a regional gas pipeline alongside the proposed Adriatic-Ionian Highway that would connect Montenegro with neighboring Adriatic Coast countries. The current and previous governments signed non-binding agreements, including with U.S. firms, to explore potential LNG regassification and gas-fired TPPs. The anticipation of the EU carbon border adjustment mechanism in 2026, the absence of gas transmission infrastructure, and existing cheap coal-fired power have complicated natural gas investment prospects in Montenegro. However, if offshore reserves are proven or Montenegro commits to integrating with neighboring countries’ pipelines, then oil and gas storage, processing, and transmission, technology and infrastructure could present investment opportunities.

Resources

Ministry of Energy and Mining

Admir Sahmanovic, Minister

81000 Podgorica, Rimski trg 46

Web site: Ministarstvo energetike i rudarstva

 

Ministry of Ecology, Sustainable Development and Northern Region Development 

Damjan Culafic, Minister

81000 Podgorica, IV Proleterske brigade 19

Web site: Ministarstvo ekologije, održivog razvoja i razvoja sjevera

 

Energy and Water Regulatory Agency of Montenegro 

Igor Telebek, Executive Director 

81000 Podgorica, Bulevar Svetog Petra Cetinjskog 96

Web site: https://regagen.co.me/ 

 

Elektroprivreda Crna Gora (EPCG)

Zdravko Dragaš, CEO

81400 Niksic, Njegoseva 2

Web site: Elektroprivreda Crne Gore AD Nikšić 

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