The existing lignite power plant in Pljevlja, together with the captive mine, has already heavily polluted the town with dust and other emissions. The main social impacts are therefore health costs and demographic changes in the town as outward migration has accelerated in the last few years. The new plant is touted as offering job opportunities and lessening pollution due to the installation of district heating instead of individual stoves. Both of these claims are false: a new Bankwatch study has shown that the number of jobs in the mine and power plant will have to be reduced even if the new plant is built, while the power plant only includes a connection point for district heating, not the construction of an actual network, so unless the Pljevlja local authorities invest in a district heating network there will be no change.

The current plant in Pljevlja and its associated infrastructure is violating local people’s right to a healthy environment. It is expected that the new plant would perpetuate this situation to a large extent.

As well as the obvious climate impacts from coal, the plant will perpetuate the damage from the current plant in Pljevlja and its associated facilities. The town suffers from massive air pollution, partly as a result of being situated in a valley with a high number of foggy days. Pljevlja also suffers from having a huge mine, ash dump and spoilheap nearby, all of which are responsible for dust pollution during windy weather. Concerning the new plant itself, while it would obviously be less polluting than the current one, the proposed design is not in line with the new best available techniques standards expected to be adopted in the EU during 2017, and the pollution from the plant would be emitted from the cooling tower instead of the current 250 metre-high chimney, meaning that more pollution would stay in the valley.

In July 2016 the Montenegrin government published a study purporting to show that the Pljevlja II plant is economically viable. A Bankwatch analysis, however, showed that many of the assumptions in the study are flawed and appear to have been adjusted in order to make the numbers add up. There is also a red flag concerning possible corruption in the project: The Pljevlja II lignite mine has the nearby power plant as its main customer, and if the current power plant closes without a new one being built, the mine is likely to close. The fact that the Prime Minister’s brother, Aco Djukanovic, is the largest individual shareholder in the mine, raises concerns that the decision to go ahead with the project may be based on special interests rather than being properly assessed as the most economic way to satisfy energy needs.

Another issue that raises questions is the use of a non-standard selection procedure to choose the main contractor. Rather than a standard tender procedure with clear specifications and deadlines, the Montenegrin government invited companies from several countries with which it had bi-lateral agreements to submit offers.