Montenegro eyes deal with A2A on EPCG partnership by end-March - media

In 2009, A2A signed a deal to acquire from the Montenegrin government a minority stake in EPCG while taking on a significant role in its management. The Montenegrin government remains the majority owner of EPCG with a 57% stake while A2A owns 41.75%.

EPCG operates 868 megawatts (MW) of installed generation capacity, including 657 MW of hydro and 210 MW of thermal power capacity. The utility produced a combined 3,802 gigawatt-hours of electricity in 2013 at its three hydro power plants - Perucica, Piva and Male, and one thermal power plant (TPP), Pljevlja.

The main sticking point in the negotiations - held in the run-up to the expiry in March of A2A's five-year management agreement, is the construction of a second unit at TPP Pljevlja, which the Italian company would not like to be financing, news daily Vijesti reported on Wednesday, quoting sources from the Montenegrin negotiating team.

The daily further said it has learned unofficially that A2A would be ready to take a 49% stake in the project but would not wish to be its main financier.

In May, EPCG said China’s Powerchina Hubei Electric Power Survey had filed the lowest bid in the tender called last year for the construction of Pljevlja TPP's second unit, offering to build a 250 MW capacity at a cost of 277 million euro ($346 million).

Final bids for the contract were also filed by Czech company Skoda Praha and by the China Machinery Engineering Corporation, offering project costs of, respectively, 356.7 million euro for 254 MW and of 278 million euro for a 250 MW capacity.

($=0.8214 euro)