EBRD Considers €35M Loan for Montenegro Power Grid Digitalization

The European Bank for Reconstruction and Development (EBRD) is considering providing a senior unsecured loan of up to €35 million (approximately $38 million) to Montenegrin power grid operator Crnogorski Elektrodistributivni Sistem (CEDIS). The loan aims to finance CEDIS's smart digitalization efforts, including the acquisition and implementation of a SCADA/ADMS (Supervisory Control and Data Acquisition, and Advanced Distribution Management System) system and the procurement of new smart meters.

Why this matters: This investment in Montenegro's power grid infrastructure can serve as a model for other countries in the region, promoting energy efficiency and reducing the environmental impact of energy distribution. Moreover, the successful implementation of this project can contribute to the integration of renewable energy sources, aligning with global efforts to combat climate change.

The project's objectives are to reduce technical losses by 10-30%, reduce energy outages by approximately six times, allow for the integration of new renewable energy sources into the grid, and increase cyber security levels. The loan will be disbursed in two tranches: €25 million initially, with €15 million for Phase I of the SCADA/ADMS implementation and €10 million for the procurement of new smart meters, followed by a second tranche of €10 million for Phase II of the SCADA/ADMS implementation. The project is set to be approved on July 3, 2024.

CEDIS, fully owned by state-controlled electricity producer Elektroprivreda Crne Gore (EPCG), operates Montenegro's power distribution networks of up to 35 kV and has a natural monopoly over electricity distribution. The company distributes approximately 2.8 TWh of electricity to around 440,000 consumers over its 20,000 km of networks and 5,000 substations, employing around 1,470 people.

The project will optimize CEDIS's operations, resulting in an improved quality of life for Montenegro's population. It will also support the rollout of smart meters in line with European Union and Energy Community standards, with a target coverage of 87%, significantly above the EU average of 60%. This builds on a previous loan implemented with CEDIS, which resulted in a decrease in distribution losses from 23% in 2009 to 10.83% in 2023.

The EBRD's potential €35 million loan to CEDIS for smart digitalization represents a significant investment in Montenegro's power grid infrastructure. By reducing technical losses, minimizing outages, integrating renewable energy sources, and enhancing cyber security, the project aims to modernize and optimize the country's electricity distribution system. The successful implementation of this project could serve as a model for other countries in the region looking to upgrade their power grids and improve energy efficiency.

Key Takeaways

• EBRD considers €35m loan to Montenegro's CEDIS for smart grid upgrade.
• Loan aims to reduce technical losses, outages, and environmental impact.
• Project targets 10-30% reduction in technical losses and 6x fewer outages.
• Loan will finance SCADA/ADMS system and smart meter procurement.
• Project aligns with EU and Energy Community standards for smart grids.