France's AFD approves €25 million loan to Montenegro's CGES for grid modernization

The French Development Agency (AFD) and Montenegro's transmission system operator CGES signed a €25 million loan agreement, backed by a state guarantee, to modernise the strategic Perućica and Pljevlja 2 substations. The financing package also includes an EU grant of €8.5 million under the Western Balkans Investment Framework.

The upgrades will allow integration of up to 350 MW of hydro power, reinforce connections with the trans‑Balkan network and support Montenegro's shift from coal‑based generation to renewable sources. The deal was signed by CGES CEO Ivan Asanović, AFD regional director Arnaud Dauphin, Finance Minister Novica Vuković and Energy Minister Admira Šahmanović. It marks AFD’s first investment in Montenegro’s energy sector and builds on technical assistance from French grid operator RTE International.

The project is presented as the start of a long‑term partnership aimed at strengthening the country's power‑grid resilience and aligning it with European energy standards.