A2A has until April 1 to decide on the construction of the second block of thermal power plant

A2A has until April 1 to decide on the construction of the second block of thermal power plant

Podgorica, February 2, 2015/ Independent Balkan News Agency

By Adnan Prekic

Montenegrin government will give a deadline to the Italian company A2A to decide by April 1 whether it will support the development plan of the national energy company. That plan includes building the second block of thermal power plant Pljevlja. If Italians are not willing to do this project, Montenegrin Government will announce the termination of contract and the construction of the energy facility by itself.

The partnership of the Montenegrin government and the Italian company A2A expired at the end of 2014. Despite that, the government has given Italians a deadline until April 1 to state their intentions on the construction of the second block of the thermal power plant. Prime minister Milo Djukanovic said that the government will not prolong cooperation with the italian company A2A, if they for any reason do not support  the construction of another thermal power plant in Pljevlja. If we terminate the management agreement with A2A, the government, as Djukanovic described, will arrange for a domestic realisation of the project start taking action for this “undisputed development project in the energy sector”, said Djukanovic.

At the end of the 2014 expired the partnership agreement between the Montenegrin Government and the Italian company A2A in the state energy company. The Italian company after five years of management have not met the most parts of the conditions stipulated by contract, but regardless of that fact, the intent of the Montenegrin government is to retain partnership with the Italians.

The most controversial part of the negotiations is the insistence of the government that the Italians, during the next period, incorporate in their business plan the construction of the second block of the thermal power plant Pljevlja. The Italians insist on stable operating conditions in terms of legal and regulatory attribution, because their goal is to make a profit of at least  430 million EUR, which is how much they bought the minority share package.

When in 2009 the Italian company A2A bought almost half of the ownership of the national energy company it was announced that in five years the Italian partner could become the majority owner. The Italians paid at the time 420 million EUR for control of the Electric Power and the right to appoint their managers at the head of the company. The original plan envisaged an increase in revenue, reduction of network losses and the construction of new power plants.

The government’s call for the construction of the second block of the thermal power plant Pljevlja was answered by the companies: the Czech company “Skoda Praha”, two Chinese companies – “Powerchina Hubei Electric Power Survey & Design Institute”, “China Machinery Engineering Corporation” (CMEC) and the Slovak company “Istroenergo Group”. The development plan envisages that the second block of the thermoelectric power plant Pljevlja will be 200-300 MW, which will be built on the site of an existing power plant. The project will provide town heating, in cooperation with the municipality of Pljevlja.

The construction of the second block will provide a heating system for the city and so the furnace, that is used during the winter season, will consequently cease to operate. This would solve a major environmental problem in the country. The construction of the second block of thermal power plants will achieve a strategic objective in the field of energy in Montenegro. This will ensure the energy independence of the country, improve the security of supply to consumers and improve the stability and sustainability of the power system in Montenegro, which will position the country as an exporter of electrical energy.