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Home › Dodgy Deals ›
Dodgy Deal
Pljevlja II coal power plantMontenegro

Project – On record

This profile is no longer actively maintained, with the information now possibly out of date
Lead organisation:
BankTrack
Contact:

climate@banktrack.org

Pippa Gallop, CEE Bankwatch Network

Diana Milev Cavor, Green Home Montenegro

Ines Mrdovic, MANS Montenegro

Last update: 2019-09-25 12:34:30
View of Pljevlia and the existing power plant. Photo: Bankwatch

Project – On record

This profile is no longer actively maintained, with the information now possibly out of date
Lead organisation:
BankTrack
Contact:

climate@banktrack.org

Pippa Gallop, CEE Bankwatch Network

Diana Milev Cavor, Green Home Montenegro

Ines Mrdovic, MANS Montenegro

Last update: 2019-09-25 12:34:30
Why this profile?

What must happen

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. Commercial and public banks should therefore refuse to finance this lignite-fired power plant.

About
Sectors Coal Electric Power Generation
Location
Status
Planning
Design
Agreement
Construction
Cancelled
Closure
Decommission
Website http://www.epcg.com/en

Pljevlja I power station situated in Pljevlja is the only coal-fired power station in Montenegro. It went into service in 1982 and has a generation capacity of 210 MW. It produces about 40 percent of the state's electricity. The lignite is supplied from the nearby Potrlica mine operated by Rudnik uglja ad Pljevlja. Pljevlja II is the intended second unit. Montenegrin electricity company EPCG is seeking new sources of financing for the planned 254 MW second unit at the Pljevlja lignite-fired power plant in northern Montenegro after the Czech Export Bank and export credit agency EGAP in October 2016 decided not to support the project. The project requires an investment of EUR 324.5 million.

Impacts

Social and human rights impacts

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.


Environmental and climate impacts

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.


Other impacts

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.

Financiers

In October 2016 the Czech Export Bank (CEB) decided not to finance the project.

Companies

Project sponsor

EPCG

Montenegro
No companies

Other companies

Skoda Praha a.s.

Czech Republic
Website
Construction. Subsidiary of Czech utility CEZ
No companies
News
BankTrack
Partners
Blog
External
BankTrack news BankTrack blog Partner news Partner blog

NGOs expect Energy Community infringement procedure on Montenegrin coal plant

Montenegro has recently confirmed that its highly polluting Pljevlja coal plant has exceeded its allowed operating hours under the Energy Community Treaty, yet no moves have been made to close the plant. This threatens to create a worrying precedent if not tackled.
2021-04-19 | Pippa Gallop
BankTrack news BankTrack blog Partner news Partner blog

Montenegro finally cancels Pljevlja II coal power plant

2019-09-18 | CEE Bankwatch Network
BankTrack news BankTrack blog Partner news Partner blog

Montenegro scraps deal with Skoda Praha for a new coal power plant

2017-12-28 | Reuters
BankTrack news BankTrack blog Partner news Partner blog

Cooperation with Czech Skoda Praha on construction of Block II of TPP Pljevlja terminated

2017-12-27 | Government of Montenegro
BankTrack news BankTrack blog Partner news Partner blog

Balkan governments unprepared for new EU pollution rules

2017-08-17 | CEE Bankwatch Network
BankTrack news BankTrack blog Partner news Partner blog

Peak pollution near the Pljevlja lignite power plant

2017-07-18 | Bankwatch
BankTrack news BankTrack blog Partner news Partner blog

Chinese investors compete for Bosnian coal projects

2017-07-10 | bne Intellinews
BankTrack news BankTrack blog Partner news Partner blog

Montenegro to re-assess financial viability of Pljevlja power plant expansion

2017-06-26 | bne Intellinews
BankTrack news BankTrack blog Partner news Partner blog

Planned power plants in the Balkans need review as EU adopts tougher pollution standards

2017-04-28 | CEE Bankwatch Network
BankTrack news BankTrack blog Partner news Partner blog

Skoda Praha to sign TPP Pljevlja financing deal soon - Montenegro econ min

2017-01-26 | SeeNews.com
BankTrack news BankTrack blog Partner news Partner blog

Pljevlja residents protest against air pollution

2016-12-23 | CEE Bankwatch Network
BankTrack news BankTrack blog Partner news Partner blog

It is not certain that the ecological rehabilitation of first block of thermal power plant in Pljevlja will be conducted

2016-11-23 | Green Home
BankTrack news BankTrack blog Partner news Partner blog

Deceptive promises of new jobs in the coal sector don't help workers, communities or the climate

2016-11-14 | CEE Bankwatch Network
BankTrack news BankTrack blog Partner news Partner blog

Czech Export Bank baulks at backing Skoda Praha's Montenegrin contract

2016-10-26 | Intellinews.com
BankTrack news BankTrack blog Partner news Partner blog

Financing for Montenegro's new power plant falls through

2016-10-26 | Reuters
BankTrack news BankTrack blog Partner news Partner blog

Funding for Bloc II of TE Pljevlja will be easily secured

2016-10-01 | Cdm.me
BankTrack news BankTrack blog Partner news Partner blog

ŠKODA PRAHA Signed Contracts for Pljevlja Coal Power Plant Construction in Montenegro

2016-09-29 | cez.cz
BankTrack news BankTrack blog Partner news Partner blog

[Campaign update] Montenegro's Pljevlja coal plant is running out of time to secure financing

2016-09-22 | CEE Bankwatch Network
BankTrack news BankTrack blog Partner news Partner blog

Montenegrin power plant feasible only with creative accounting

2016-08-01 | CEE Bankwatch Network
BankTrack news BankTrack blog Partner news Partner blog

Key costs still missing in Montenegro coal power plant debate

2016-03-04 | CEE Bankwatch Network
BankTrack news BankTrack blog Partner news Partner blog

Up in smoke Why urgent action is needed on air quality in the Western Balkans

2016-02-29 | CEE Bankwatch Network
BankTrack news BankTrack blog Partner news Partner blog

Electricity export ambitions may prove risky for Western Balkans, shows new study

2015-03-19 | CEE Bankwatch Network
BankTrack news BankTrack blog Partner news Partner blog

Montenegrins criticise plan to bypass tender procedure in Pljevlja II coal plant procurement

2013-07-29 | CEE Bankwatch Network
Resources
Documents
Images
Links
2017-06-14 00:00:00

Planned coal power plants in the Western Balkans versus EU pollution standards

NGO document
2017-06-14 00:00:00 | CEE Bankwatch Network
2017-03-31 00:00:00

Carbon costs for planned coal power plants in the Western Balkans and the risk of stranded assets

NGO document
2017-03-31 00:00:00 | CEE Bankwatch Network
2016-07-11 00:00:00

The economics of Pljevlja II coal plant - smoke, mirrors and EU law derogations

NGO document
2016-07-11 00:00:00 | CEE Bankwatch Network
2016-11-14 00:00:00

The great coal jobs fraud

NGO document
2016-11-14 00:00:00 | CEE Bankwatch Network

Protest against Pljevlja II

2017-02-03
Pljevlja protest dec2016 3 Pljevlja protest dec2016 2 Pljevlja protest dec2016 1
In December 2016 people from Pljevlja in northern Montenegro took to the streets to protest against the awful pollution that has been plaguing the town for years. Supported by NGOs Ozon and Green Home, the protest aimed to put pressure on the authorities to take action to resolve the situation, which is caused by the nearby lignite power plant together with domestic burning of coal and wood.

Photos of site Pljevlja I power plant

2016-12-12

CEE Bankwatch Network webpage on Pljevlja II

CEE Bankwatch Network coal in the Balkan campaign website

Green Home website

Pljevlja Power Station - Wikiwand website

Pljevlja Power Station profile on Sourcewatch website

Wikipedia page on Pljevlja Power Station

Peak pollution Eight months of independent monitoring of air quality in the Balkans

Report by Bankwatch

Updates

2019

2019-09-17 00:00:00 | Montenegro cancels Pljevlja II coal plant project

On September 17, Montenegrin Prime Minister Duško Marković announced that the government is no longer pursuing the planned 254 megawatt expansion of the Pljevlja lignite power plant, making Montenegro the first western Balkan country to officially cancel a new coal project. Read more details here, via CEE Bankwatch Network.

2017

2017-06-14 00:00:00 | Almost none of new coal power plants planned in the Balkans will meet EU pollution standards, according to a new analysis

On 28 April this year, EU officials adopted new technical standards for large combustion plants, the so-called ‘LCP BREF’, which sets out the best available techniques for controlling pollution to air, water and soil, as well as the emission limits that must be achieved by applying these techniques. Bankwatch’s analysis looks at eight coal-fired units totalling 2.6 GW in capacity planned in Bosnia-Herzegovina, Kosovo, Macedonia, Montenegro, and Serbia, plus the Stanari plant in Bosnia-Herzegovina which started commercial operation last September. Compared to the air pollution limits set in the BREF, five of the planned units would certainly not meet the new standards, while insufficient information is available for the remaining three.

2017-05-16 00:00:00 | Environmentalists take planned Montenegrin coal plant to court

Green Home, a Montenegrin environmental non-governmental organisation, on Friday submitted a complaint to the Administrative Court of Montenegro requesting the cancellation of the environmental approval for the controversial Pljevlja II coal power plant the government seeks to build. The approval, issued by the Environmental Protection Agency on 22.2.2017, failed to include several elements stipulated by the Law on Environmental Impact Assessment, such as a justification for the decision, responses to comments provided during the public consultation, and a list of measures to address environmental damage during the construction and operation of the plant (source CEE Bankwatch Network).

2016

2016-10-26 00:00:00 | Czech Export Bank decided not to finance Plevlja coal-fired power plant

The state-owned Czech Export Bank (CEB) has pulled out of a CZK nine billion (EUR 333million) deal to finance the construction of a new unit at the Pljevlja coal-fired power plant in Montenegro by Skoda Praha, a unit of state-controlled giant CEZ, local media claimed on October 26. Unnamed sources told Czech daily Hospodarske noviny that CEB sees the project ordered by Montenegrin power monopoly EPCG as too risky. The newspaper claims to have seen a letter from the state lender to CEZ reporting the refusal to participate (source BNE Intellinews).

2016-09-22 00:00:00 | Montenegro's Pljevlja coal plant is running out of time to secure financing

The Czech daily Hospodarske Noviny (English: "Economic Newspaper") has reported that the Czech Export Bank (CEB) and export insurance agency EGAP may not be be able to finance the Pljevlja II lignite power plant in Montenegro due to new OECD rules entering force on 1 January 2017 (source CEE Bankwatch Network).

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