The French Government assigned to the Government of Montenegro a loan in amount of €8.479 million for the reconstruction and enlargement of the Montenegrin electric distributive network.

This loan was assigned by France from its Emerging Country Reserve Fund [1], a soft-loan instrument Montenegro was eligible for. Having a strictly non-profitable character for last users, RPE loans are devoted to finance infrastructure projects and equipment of a structural nature, with the involvement of French business.

The project that Montenegro applied for RPE loan passed strict selection and satisfied justification criteria, to finally be approved by both the French Government and the Organisation for Economic Co-operation and Development (OECD). Terms are 15 years of total repayment plan, including a 5-year grace period and an interest rate of 0.9%.

Final negotiations beetwen Montenegro national electricity company Elektroprivreda Crne Gore a.d. Nikšić (EPCG) and French equipment supplier Schneider Electric are in process. The definitive agreement for equipment deliverance is expected to be signed till the end of July 2007, and first deliverance is planed in October.

The project of reconstruction and enlargement of the electric distributive network in Montenegro includes structures that are ranked as first priorities within EPCG-Functional Unit distribution:
 Reconstruction (whole equipment replacement) of facilities 10 kV in substation 110/10 kV Podgorica 3-Cvijetin brijeg;
 Reconstruction of substations 35/10 kV (replacement of complete equipment with capacity increase) Bistrica-Nikšić, Humci-Cetinje, Buljarica-Budva and Škaljari-Kotor);
 Construction of substation 35/10 kV Zelenika due to quality improvement of power supply of consumers on that region; and
 Construction 59 modern and prefabricated substations 10/0.4 kV for all distributive regions in Montenegro.

Through this loan, the French Government has made possible the resolving of a part of the most urgent and most critical problems in Montenegrin electric distributive network, that is to say:
 Equipment out of date (unreliable and unsecured work, high maintenance costs);
 Spare parts unavailability; and
 High number of brake downs due to low reliability.