Fortum, EGPC win tender to build 100 MW solar plant in Montenegro

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Montenegro’s Ministry of Economy has announced that the consortium formed by Finnish utility Fortum and state-owned power provider EPGC is the winner of the 100 MW solar tender it launched in May.

The ministry said the consortium offered the best conditions for newly created jobs and payment of land lease for the project, while also providing the necessary technical and financial capabilities.

The consortium offered €0.33 per square meter for the annual lease, and to create 226 jobs during the rental period. Furthermore, it said it intends to invest approximately €178 million in the 100 MW project, with an unspecified number of domestic companies contributing a total of around €20 million. It its own press release, Fortum said that the consortium has offered to build a PV facility with an installed power of 250 MW, and that Sterling & Wilson International Solar FZCO is also partnering in the project. “The next step in the process is to negotiate the final contract with the State of Montenegro, expected to be concluded during this year,” Fortum specified without adding further details.

The tender’s initial – minimum – price of the annual lease was €0.05/m($0.058).

The second best offer was that of Malta-based International Renewable Energy Development Limited (IREDL) – itself a joint venture between Chinese multinational power company and electrical equipment manufacturer Shanghai Electric Power and Malta’s Enemalta Corp utility. It offered €0.05 per square meter, the creation of 25 jobs, and an overall investment of €166 million, of which €21 million coming from domestic investors.

The third and last offer, that of local consortium Montesolar, was judged insufficient, the ministry said in its statement.

The Montenegrin government said the land will be leased for 30 years. A total 6,621,121m² will be leased for the project, ensuring the government can bank on a minimum return of around €331,000.

The solar plant, located in the southernmost and sunniest part of the country will sell power to the local grid under a long-term PPA.

Once built, the facility will help the country considerably increase its quota of renewable energies. The vast majority of Montenegro’s electrical power demand is currently met by the 225 MW Pljevlja thermal power plant in the north of Montenegro, and two large hydropower plants at Perućica (307 MW) and Piva (363 MW). The country, however, utilizes only a small percentage of its hydro potential.