Montenegro: Lastva - Pljevlja Transmission Line



Project number:


Business sector:

Power and energy

Notice type:


Environmental category:


Approval date:

16 Apr 2013



PSD disclosed:

24 Feb 2012

Translated version of this PSD: Montenegrin

Project Description

The EBRD is considering arranging a syndicated loan of up to €65 million for Crnogorski Elektroprenosni Sistem (CGES), the electricity transmission system operator of Montenengro, to upgrade the country’s power network and create electricity transmission infrastructure that would link Montenegro and Italy.

The proposed project includes the construction of a new 400/110/35 kV substation at Lastva on the Adriatic coast, the diversion and strengthening of the existing network around Lastva, and the construction of a new 155km 400kV line from Lastva on the Adriatic coast to Pljevlja in Northern Montenegro.

This project is linked to the planned construction of an undersea cable from Italy to Montenegro, which would come onshore at Lastva.

The investment directly supports the development of the regional electricity market in Southeast Europe by putting in place the infrastructure that will allow electricity trade between the region and Italy.

Transition Impact

The transition impact potential for the Project stems primarily from the following:

  • Expansion of competitive market interactions in other sectors: The key source of transition impact for the Project is the creation of wider markets and the stimulus for liberalisation, competition, efficiency and investment this will generate. The Project will link the Balkan power market to Italy creating a larger, more liquid market with the potential for greater efficiency and more effective competition, as well as creating a more attractive environment for investment.
  • Transfer and dispersion of skills: Terna's investment and involvement in CGES is a strategic partnership which is expected to evolve into a close cooperation between the two companies. This will support CGES's development into a modern, commercial utility.
  • Setting standards for business conduct: By undertaking a comprehensive environmental and social due diligence the Bank will ensure that the project complies with the typical IFI environmental and social standards and that appropriate consultation takes place.

The Client

Crnogorski Elektroprenosni Sistem (CGES), the electricity transmission system operator of Montenengro.

EBRD Finance

€65 million through the use of the Bank’s A/B loan structure and/or by parallel loans from commercial lenders.

Project Cost

€105 million.

Environmental Impact

Category A. The construction of a high-voltage transmission lines falls under Annex 1 of the Bank’s Environmental and Social Policy, requiring an Environmental and Social Impact Assessment (ESIA) and consultation prior to Board consideration.. The European Community has funded consultants to assist CGES in preparing the ESIA for this project in accordance with EU EIA Directive and Bank requirements, together with a Non-Technical Summary, an Environmental and Social Action Plan (ESAP) and a Stakeholder Engagement Plan (SEP). In accordance with the SEP, these documents – the ESIA package - were disclosed locally on 23 December 2011 for 120 days of public review and comment. Consultation meetings are to be held in March 211 with authorities and nongovernmental organizations in Podgorica and with affected communities along the corridor.

The general corridor was selected by the Ministry of Sustainable Development and Tourism following preparation of a Strategic Environmental Assessment in early 2011. This was followed by preparation of the ESIA package to meet EBRD requirements for Category A projects.

The corridor passes through Lovcen National Park, following as much as possible an existing transmission line corridor that is well away from the central, more environmentally sensitive, part of the Park. In addition, the corridor passes through Durmitor National Park, whose Tara River canyon is the deepest in Europe and has been designated by UNESCO as a World Heritage Site and a Biosphere Reserve. The route through the Park will follow an existing transmission line, and this 110kV line will be re-mounted on the new towers for the current 400kV project to avoid the need for significant new ground disturbance in the Park. In addition, the line itself will be equipped with bird avoidance devices as needed to minimize the risk of collision. The site of the the Lastva substation at the southern end of the transmission corridor found an extended area that supports a protected wetland plant species. Any area disturbed here will require an equivalent area to be established and/or protected elsewhere. All these requirements will be part of the Environmental and Social Action Plan (ESAP) for the Project.

The Banks’ environmental and social due diligence has confirmed that the project is structured to meet the Bank’s 2008 Environmental and Social Policy and Performance Requirements. Beyond those above, key requirements of the ESAP include control of construction-related dust and erosion as well as detailed biosurveys prior to construction of individual towers to allow appropriate micro-location to reduce or avoid impacts on sensitive habitats or organisms. Also the ESAP requires consultations with competent authorities and representatives of UNESCO to seek consent/agreement for construction.

An Environmental and Social Impact Assessment and other documents are available at locations identified here and here. The ESIA may be downloaded from the Company website.

There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation

The preparation of the project was supported by the EU Infrastructure Preparation Facility of the Western Balkans Investment Framework (WBIF). Also Technical Cooperation funds were provided by the Czech Republic to fund consultants who assisted in the environmental due diligence for this project.


Business opportunities

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