Gvozd Windfarm



Project number:


Business sector:


Notice type:


Environmental category:


Approval date:

30 Nov 2022



PSD disclosed:

10 Jun 2022

Project Description

Up to EUR 82 million senior secured corporate loan to Elektroprivreda Crne Gore AD Niksic ("EPCG"), the Montenegrin national power utility, and to Green Gvozd LLC, a special purpose vehicle to be fully acquired by EPCG, for the purpose of financing the acquisition, development, construction and commissioning of a 54.6 MW wind power plant located near village Gvozd, municipality of Niksic, Montenegro (the "Project").

Project Objectives

The Project will result in the addition of 54.6 MW renewable energy generation capacity to the country, which is expected to produce at least 141 GWh of renewable energy per year. The construction of new renewable energy generation capacity in Montenegro is fundamental to the country's plans regarding the diversification of electricity generation to substitute its legacy thermal coal assets, which currently provide almost half of Montenegro's domestic electricity generation.

Transition Impact

ETI score: 80

The operation will be 100% GET. Increased renewable energy generation capacity and production will deliver CO2 emission savings of approximately 104,000 tonnes annually.

Client Information


ELEKTROPRIVREDA CRNE GORE AD NIKSIC Elektroprivreda Crne Gore AD Niksic ("EPCG") and Green Gvozd LLC. EPCG is a majority state-owned electricity utility of Montenegro, active in production, distribution and supply of electricity. EPCG produces the bulk of its energy from three power plants, consisting of the 225 MW lignite-fired plant Pljevlja, the 307 MW Perucica hydro power plant, and the 342 MW Piva hydro power plant. EPCG also operates several small hydropower plants with a total capacity of 2.5 MW; the Sponsor is also the 100% owner and operator of the Montenegrin distribution company CEDIS (also client of EBRD), and it supplies 370,000 consumers with electricity. Green Gvozd LLC is a special purpose vehicle created for the development of the Gvozd wind farm and will be fully acquired by EPCG.

EBRD Finance Summary

Secured corporate loan of up to EUR 82 million, of which part is expected to be syndicated on a best efforts' basis post signing.


Additionality on this Project stems from the terms (longer loan tenor than is generally available in Montenegro), resource mobilisation (additional commercial funding through A/B loan or parallel loan), and conditionalities (implementation of ESAP, procurement in accordance with the EBRD's Procurement Policies and Rules).

Environmental and Social Summary

Categorised B (2019 ESP). The Project is in the near vicinity (approx. 3 km) of the operational Bank financed 72 MW Krnovo wind farm (OpID 44546; category B) in Montenegro, developed by the same experienced Austrian developer and technical consultant, Ivicom Consulting GmbH.

The ESDD undertaken by independent consultants confirmed that the project (54.6MW windfarm and associated facilities consisting of c 18 km 110 KV transmission line and substations, including the reconstruction of existing ones) is structured in line with EBRD PRs as well as national and relevant EU legislation. Overall, studies undertaken to date (including local EIA) have shown that the environmental assessment and social assessment procedure and reports have been carried out with sufficient identification of E&S impacts (including cumulative and biodiversity impacts) and mitigation measures have been agreed in order to address the impacts at Project level.

EPCG is operating under an Integrated Management System (IMS) in accordance with ISO norms (ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018). The IMS is supplemented by several policies and procedures, regular committee meetings, and monitoring by means of an advanced Health, Safety, Security, Environment and Quality (HSSEQ) system, safety programs and KPIs assigned at the Corporate level.

Overall, studies undertaken to date (including local EIA) have shown that the Gvozd wind farm, is not located in a sensitive area in terms of biodiversity (such as IBAs or Natura 2000 areas) or near human receptors. Results of biodiversity studies show low risk of bird collision from the planned wind farm or the existing Krnovo wind farm. The ESDD noted that due to the fact that the final preferred turbine model has not been finalised, as well as their final location, the collision risk modelling will need to be repeated/updated using a worst-case scenario and the new turbine parameters. The cumulative impact study will also need to be revised once the final windfarm design is agreed.

The ESDD has confirmed that Gvozd will need to complete the remaining acquisition of 72 agricultural land plots for the transmission lines and other facilities. As land acquisition started several years ago, but was never finished, ESDD included a land audit and depending to the result of land audit the supplementary Resettlement Plan (S-RP). Provisions have been added to ESAP, indicating mandating the Company to implement the S-RP and provide a Completion Report to the Bank prior to the start of construction works on the project site.

The Company has updated its sustainability disclosure documentation for this project and developed an NTS and SEP that covers the results of impact assessments. The Company also updated the existing stakeholder engagement plan (SEP) and EHS procedure.

Based on the ESDD findings, an ESAP has been developed. The ESAP actions include amongst others, requirements for update the cumulative impact assessment with regards to the existing Krnovo Wind Farm, to develop and implement an project specific ES Policy and Environmental and Social Management System (ESMS), cascade key PR2 aligned policy requirements across contractors and sub-contractors; include contractual clauses within the contractors' agreement requiring them to put in place policy and procedures on Gender-Based Violence and Harassment and security; for the project entire workforce, produce a Construction and Operation Biodiversity Management and Monitoring Plan'

To manage potential supply chain (SC) concerns in wind sector projects, the Company included in the tender documentation additional requirements related to the forced labour risks to enable the Client, with EBRD support, to apply SC due diligence during selection process and adopt necessary mitigation measures if SC risks are identified. These requirements include, among other things, disclosing by WTG suppliers the designated facilities and principal suppliers to be used for the project, labour audit of the designated facilities if required, and WTG suppliers accepting SC focused commitments aligned with ESP 2019 PR1 and PR2. ESAP also includes specific actions for the Company to implement SC risk management should SC risks arise.  

The Bank will monitor the project through Annual Environmental and Social Reports.

Technical Cooperation and Grant Financing


Company Contact Information

Mr. Miro Vracar, dipl.ecc (CFO)
+382 40 204-160
EPCG AD Niksic / Montenegrin Electric Enterprise AD, Vuka Karadzica 2, Niksic Montenegro

PSD last updated

06 Dec 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

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More information on the EBRD’s practices in this regard is set out in the ESP.

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The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

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Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.


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