Agreement signed in Podgorica on laying of underwater power cable across the Adriatic Sea

Montenegrin Minister of Economy Branko Vujovic and the representatives of Italian Terna and Montenegrin Power Transmission System (CEPS) signed an agreement yesterday on laying of the power cable across the Adriatic Sea.

According to the Agreement, the cable will be laid between Tivat on Montenegrin side and Pescara on Italian coast prior to 2015. Its length will be 450 kilometers, 375 km of which will be laid under the water.

After he signed the Agreement, Vujovic said that the CEPS would, together with partners from Serbia and Bosnia and Herzegovina, build long-distance power lines toward those countries.

Based on the Agreement, the Montenegrin side will get 20% of the capacity of the underwater cable, and Montenegro should receive about 40 million euros per year from the use of that cable.

As it was pointed out on the occasion of the Agreement signing, a total investment will amount to about 750 million euros.

Construction of the power cable of 1,000 MW will be mainly financed by Italy and, in return, Terna has the right to recapitalize the CEPS with 34 million euros by the end of 2010 and, thus, acquire 22% of shares in that Montenegrin state company.

Italian Minister for Economic Development Paolo Romani, who attended the signing ceremony, said that "thousands of megawatts will be transferred from Montenegro to Italy" across the Adriatic Sea.

That will, as he said, help the power supply to Italy improve.

Romani confirmed the interest of Italy in participating in the construction of hydroelectric power plants on the Moraca, but he added that there were "many other initiatives" as well. Thanks to that, according to him, Montenegro may become "the power hub for the entire geographical area".

The cooperation between Montenegro and Italy is especially well-developed in the field of energy, which is a result of earlier agreements reached by the prime ministers of the two countries - Milo Djukanovic and Silvio Berlusconi.

Italian company A2A is the majority owner of the Electric Power Company of Montenegro and, according to the first plans, the project signed yesterday should also include construction of a long-distance power line from Pljevlja to Tivat, as well as substations near Tivat.

Construction of the power cable will, judging by the first estimates, make Montenegro "the power hub" between southeast Europe and Italy, that is, western Europe.