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Member of the Montenegrin Parliament Filip Vukovic, who is also a member of the Parliamentary Economy Committee, said in an interview that if the Parliament adopts the draft law on the ratification of the Paris Climate Agreement, Montenegro could not be able to proceed with the project for the construction of second unit at coal-fired thermal power plant Pljevlja, furthermore, the current unit at the plant will have to reduce its production.
Vukovic said that the country’s intention to build a second block at TPP Pljevlja and increase production of electricity from coal runs directly counter to the ratification of the Paris Agreement and the logical conclusion is that if parliament adopts the law, Montenegro will not be able to build the second block and thus reduce power imports. It would also mean that the existing block would have to reduce production in order to lower CO2 emissions.
Following Vukovic’s statement, Montenegrin Ministry of Economy replied that that the law to ratify the agreement had been drawn up after an analysis into all possible effects the implementation of the agreement could have, adding that the construction of the second block at TPP would actually contribute to the struggle against the negative effects of climate change.
The Paris Agreement was adopted in December 2015, came into force in November 2016 and has been ratified by 154 of the 197 countries which reached the agreement. It calls for measures to limit the rise in global temperatures at a level of 1.5 degrees Celsius. Montenegro plans to reduce its carbon-dioxide emissions by 30 % compared to the year 1990 by 2030.
In September 2016, a contract for the construction of second unit at TPP Pljevlja worth 324.5 million euros between Montenegrin power utility EPCG and Czech company Skoda Praha has been signed. It marked the completion of a two-year period of negotiations and this will be the first major energy facility to built in Montenegro in the last 35 years. Last year, the Government selected the offer of Czech company Skoda Praha as the best on public tender for the construction of the second unit at TPP Pljevlja. Skoda Praha offered to build 254 MW unit for 338.5 million euros, and to secure a loan for 85 % of the required investment. However, due to the request for additional works, the cost offered by the Czech company increased to 359.4 million euros, but the Government managed to lower the price by some 25 million euros through the negotiations, so the final price is 324.5 million euros.
However, in October same year, Czech Export Bank (CEB) informed the representatives of Montenegrin power utility EPCG and the company Skoda Praha that the bank is having trouble providing financing for the project for the construction of second unit at TPP Pljevlja. The bank cited difficulties in obtaining Government guarantees as the main problem, because the Government previously refused the bank’s request that the state should be a guarantor for the loan that should be used for financing the project. Czech Export Bank insisted on obtaining guarantees from both the state and EPCG during negotiations, but the state refused to provide any guarantees since it was not a requirement in the public tender in 2013.
In February 2017, Skoda Praha has selected US company General Electric as its partner in the project, also submitting an alternative proposal for financing the project. The negotiations regarding the financing of the project are still ongoing.
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Tags: coal, electricity, environmental, Montenegro, Paris agreement, Pljevlja, thermal, TPP