In the wake of the state visit to Italy (Feb. 3-4) by the President of Montenegro, H.E. Mr. Filip Vujanović, yesterday evening, on February 5, 2010, a Montenegrin Delegation headed by the Prime Minister, H.E. Mr. Milo Đukanović, and composed of T.Exc. the Economy Minister, Mr. Branko Vujović, and the Foreign Minister, Mr. Milan Roćen, departed for a 24-hour official visit to Rome to hold talks the next day, from 01:00pm local time at the Palazzo Chigi, with the center-right Italian Prime Minister, H.E. Mr. Silvio Berlusconi, aimed at (i) signing two major bilateral agreements and (ii) discussing the Italo-Montenegrin partnership to advance the country’s European and Euro-Atlantic perspective, as well as various regional issues connected to the revitalisation of the Central European Initiative (CEI) and the Adriatic-Ionian Initiative (AII) [1] — currently chaired since January this year by Montenegro for the first organisation, and to be chaired by the country from next May for the second.

After a previous meeting, scheduled on December 14 last year, was cancelled following the attack, the evening before, on Italian Premier during a rally in Milan, this new encounter between both Heads of Government — the third in the past eleven months [A] [B] — evidenced if necessary the high level of co-operation that exists between Montenegro and Italy, and the strong dedication of each side to expanding and promoting their partnership, as reflected by the special protocolary character given to today’s signing ceremony (03:00pm local time) of the two agreements, the first being an Italy-Montenegro Strategic Co-operation Agreement, which will map out the general strategic directions in bilateral co-operation for the years to come, including on trade, investments, infrastructure, cultural and education exchanges, defense, law enforcement, health, sports, anti-trafficking and inter-Foreign Ministry co-operation; and the second, an Inter-Governmental Energy Agreement, signed between Economy Minister Vujović and his Italian counterpart, H.E. Mr. Claudio Scajola, on Italy-Montenegro interconnection of electrical systems and international trade of electrical energy, meant to alleviate electricity shortages in both countries.

As part of the wider Italian investors’ plan to spend up to €5 billion ($6.86 billion) in energy projects and infrastructure in Montenegro — announced in mid-June last year during the official visit of Economic Development Minister Scajola to Podgorica after the founding, five months earlier, of a joint economic association between the two countries — the latter agreement in particular, making Montenegro one of the five planned or already operational Italian electricity hubs in the Balkan ring (Montenegro, Slovenia, Croatia, Albania and Greece), came within the framework to link the two Adriatic states via a 375 km-long submarine segment (DC interconnection cable) and a 75 km-long segment on land having an initial transportation capacity of 1,000 megawatts [2], and subsequently to construct interconnection lines linking Bosnia and Serbia to import green electricity from renewable energy sources via the Drina Valley [3].

The nearly €700-million ($959.9 million) investment project was engaged on October 13, 2008 after the Italian energy transport company Terna and the Montenegrin electricity company Elektroprivreda Crne Gore (EPCG) signed in Rome an agreement to jointly develop the electricity interconnection, followed on November 7, 2008 by another agreement between Terna, the Montenegrin Ministry for Economic Development and EPCG to launch the feasibility study. On December 23, 2008, Terna and EPCG signed the agreement on the implementation schedule of the interconnection project. Two days ago (Feb. 4), just before the Montenegrin Delegation departed for Rome, the Government of Podgorica adopted in Cabinet meeting the bilateral Memorandum of Understanding (MoU), signed with Italy in mid-June 2009, on providing institutional support to national operators for the construction of the interconnection between the coastal towns of Pescara (Italy) and Tivat, ensuring security of Montenegrin electric power supply systems and increasing their exchange capabilities, notably through an additional €90-million investment in the Montenegrin grid and a high-voltage transformer unit outside Tivat. The deadline for the completion of the submarine cable — in which Montenegro will get a 20% share, is 2013 while the overhaul of the Montenegrin power grid is due by 2015.
Additionally, in order to achieve Montenegro’s electric power interconnection with neighbouring Serbia, Terna should shortly sign a triple memorandum with the Montenegrin operator Prenos and the Serbian public company Elektromreža Srbije (EMS) on the construction of a new 400 kV long-distance transmission system departing from West Serbia, in Bajina Bašta (Drina Valley corridor), to Montenegro. With the soon operational 400 kV connection between Serbia and Romania, Montenegrin will ultimately become the main regional transit node of electricity from Eastern and Western Europe to Italy.

On the road to European integration, secured by NATO in the country’s perspective to soon become a full member of the Atlantic community, Montenegro is called to play in a near future a key regional role as an important transit country and the centre of a new European Power Exchange for electricity in this part of the continent. Backed by the United States of America, in the whole scheme of European OTANians to stabilise the region by enhancing its economic unity through the transportation corridors’ interconnection (and alternatively to reduce the Russian pressure on the realisation of Montenegro’s GDP), Italy took in the past two years a leading role in this plan by instituting itself as the main motor of investments in the region. In 2009, Italian electricity producer and distributor A2A acquired a 43.7% stake in EPCG and intends to invest €400 million in the company by 2010-2014; A2A also announced plans to build an initial group of four small hydroelectric power plants along the Morača River with a total capacity of 240 megawatts. Similarly, Enel Group, one of the major energy suppliers in Europe and the number one electricity producer and distributor in Italy, is interested in building an 800-1,200 megawatt coal-fired power plant in Montenegro together with Duferco Group, which in turn declared in January 2009 an interest in building a 85 megawatt solid waste incinerator in the country. In mid-June last year, representatives of Montenegrin, Serbian and Italian governments agreed to launch a feasibility study — carried out by the world leader in the design and construction of rail infrastructure Italferr — for a €1.5 billion overhaul of the key railway line connecting the Montenegrin Port of Bar with the Serbian capital, of which 1 million should be allocated by the Italian Ministry of Economic Development.

In this context, during the joint press conference given by the two Heads of Government following the signing ceremony, Prime Ministers Berlusconi and Đukanović did not hesitate to qualify this historical momentum in the Italo-Montenegrin relationships — making in the same time Montenegro the front door of Italian firms in Eastern Europe and Italy the country’s first foreign investor — of the “deal of the century”, the Montenegrin Premier adding that it demonstrated if necessary that his country is “a regional partner of choice in the Western Balkans, given that Montenegro is a factor of stabilisation and integration for the mutual benefit and development of all the Balkan countries and their peoples.” On the political point of view, Prime Minister Berlusconi reiterated that Italy fully supported Montenegro’s Euro-Atlantic choice and will continue to provide ample support for the country’s entry in the European Union (EU), notably by promoting the principle of joining the EU based on an individual approach and each country’s own merits, in accordance with the Thessaloniki Process. He stressed that Italy would do its best for Montenegro to obtain the status of EU candidate because “you deserved it and you are only one step away from joining NATO,” he said. The Italian Premier also emphasized that the fight against organised crime was a shared priority in the bilateral relations with Montenegro, recalling that Italy has recently ratified the agreement signed in July 2007 regarding co-operation in combating organised crime, and has subsequently set up within its Embassy in Podgorica an operational unit of the Italian Interior Ministry to work with the local Montenegrin authorities.

Alternatively, as part of the panel of leading Italian entrepreneurs received at 02:30pm local time at the Palazzo Chigi to attend the signing ceremony, the Montenegrin Delegation held wide-ranging business talks on all issues of mutual interest, notably with Messrs. Fulvio Conti from Enel, Giuliano Zuccoli from A2A, Antonio Gozzi from Duferco, Francesco Becchetti from the Becchetti Energy Group (BEG), Flavio Cattaneo from Terna (former Director General of the Italian biggest television company RAI), and many others. During its stay in Rome, the Delegation was accompanied by H.E. Mr. Darko Uskoković, Montenegrin Ambassador to Italy.