The FINANCIAL -- Montenegro, proclaimed a “Green State” back at the 1992 Earth Summit in Rio de Janeiro, is starting to live up to its green credentials.
Blessed with an ideal climate for the development of renewable energy sources, it is tapping into its abundant natural resources of sun, wind and water.
The small Balkan country still has work to do. It remains a carbon and energy intensive economy. However, it is steadily increasing the share of clean energy in its energy mix.
In 2015, the EBRD, supported by Norway, provided financing for Montenegro’s Krnovo wind farm.
This was the first ever utility-scale private electricity generation project in the country and the first major investment in Montenegro’s electricity generation since the 1980s.
At the time of its construction, it was also the first ever large-scale private wind energy project in the Western Balkans -- a milestone in demonstrating how private sector capital and expertise can be mobilised to implement such an ambitious project.
Today, the wind farm represents eight per cent of the total installed power capacity and contributes to six per cent of total electricity production in Montenegro. That translates into more than 180,000 tons of CO₂ avoided emissions per year and an annual supply of more than 100,000 households.
“In a country where thermal power is still a major source of electricity, Montenegro's use of its abundant wind resource is key to improving capacity generation in the country,” says Jaap Sprey, the EBRD’s Head of Montenegro.
“The Krnovo wind farm, located in Niksic in the Central-West part of Montenegro sets a perfect example of the EBRD’s impact in the region.”
Renewable energy projects still face multiple challenges from the institutional, policy and regulatory level, which can hinder the development and uptake of greener resources.
In Montenegro, the renewables sector is still at its infancy, and lack of administrative capacity is the key bottleneck to further promotion of green energy.
With the support of Norway, the Bank has worked with the country’s public authorities to design a more robust legal framework for supporting sustainable energy projects.
This includes assistance with the level of feed-in-tariffs, drafting regulations for government support renewable energy, and the development of a bankable power purchase agreement for renewable energy projects.