UPDATE – Montenegro takes bids for stake in hydropower utility

The government of Montenegro seeks bids in a privatization auction for an 18.3 percent stake in government-owned hydropower utility Elektroprivreda Crne Gore (EPCG). Bids are due April 30.

Of the 18.3 percent being offered, 9.15 percent of the equity is to be sold from existing capital and a further 9.15 percent is to be a new share issue to boost the capital of the power company, the Agency of Montenegro for Economic Restructuring and Foreign Investments said February 2. The offering was slightly less than the 22 percent of EPCG capital that the government had said it would offer. (HNN 1/16/09)

Headquartered in Niksic, EPCG operates generation, transmission, and distribution of electricity in Montenegro. It has two large and seven small hydropower plants and one thermal plant. Its holdings include the 307-MW Perucica hydro project (HNN 1/15/09) and the 342-MW Piva hydro project. (HNN 1/14/09)

The government said it currently is unbundling EPCG’s transmission function from the rest of the utility and that the resulting transmission company will not be part of the privatization.

The investor will receive a five-year management contract and will be obliged to buy out a stake from small shareholders at the same price it pays to the government. After five years it will acquire the right to purchase additional shares from the government to attain majority ownership.

Decision pending on Moraca River hydro projects

Immediately upon completion of the privatization tender, the government said it would �pass a decision on construction of hydropower plants on the Moraca River.�

The government recently put off an invitation to potential developers of four proposed hydroelectric projects on the Moraca River totaling 238 MW. The projects include 127-MW Andrijevo, 37-MW Raslovici, 37-MW Milunovici, and 37-MW Zlatica. (HNN 11/17/08)

Without a new power-generating facility for 25 years, Montenegro lacks on average about 35 percent of its electricity needs a year. EPCG, which is 70.6 percent owned by the state, posted a 7 million euro (US$9 million) loss in 2008. The company is estimated to be worth around 1 billion euros (US$1.28 billion).

To qualify for the privatization, bidders must have produced or distributed at least 1,500 gigawatt-hours of electricity in the last fiscal year, and have had revenue of at least 250 million euros (US$321.2 million), assets worth at least 500 million euros (US$643 million), and credit ratings of at least ‘BBB-‘ assigned by Standard &Poor’s or Fitch, or ‘Baa3’ by Moody’s.

Bid documents may be obtained by e-mail or fax request to the Secretary of the Tender Commission at the address below, marked �The Request to Purchase the Tender Documentation,� with e-mail copies to EPCG and adviser Unicredit Markets &Investment Banking at the addresses below. The Secretary is to provide a confidentiality agreement and instructions for paying the document fee of 50,000 euros (US$64,315).

Bids are due by 4 p.m. April 30. For information, contact:
o Ivana Saranovic, Secretary of the Tender Commission, Government of Montenegro, Jovana Tomasevica bb, 81000 Podgorica, Montenegro; (382) 20-242640; Fax: (382) 20-245756; E-mail: ivanas@t-com.me; Internet: www.agencijacg.org/novi/0-English/home.htm;
o Boris Buskovic, Elektroprivreda Crne Gore AD Niksic, Vuka Karadzica 2a, 81400 Niksic, Montenegro; (382) 40-204239; Fax: (382) 40-214262; E-mail: buskovic@t-com.me; Internet: www.epcg.cg.yu/enindex.html;
o Ana Mudrinic, Unicredit Markets &Investment Banking, Zagrebacka banka d.d., Savska 60, 10000 Zagreb, Croatia; (385) 16305412; Fax: (385) 16305413; E-mail: ana.mudrinic@unicreditgroup.zaba.hr.

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