Western Balkans energy financing

In late July 2026, the French Development Agency (AFD) approved a €25 million loan, backed by a state guarantee and complemented by an €8.5 million EU grant, to Montenegro’s transmission operator CGES for modernising two key substations. The upgrades are designed to integrate up to 350 MW of hydro power, reinforce links with the trans‑Balkan network and help Montenegro shift from coal‑based generation to renewables, marking AFD’s first direct investment in the country’s energy sector.

A few days later, Albania and Germany signed a €114 million cooperation package that combines €90 million in loans and €24 million in grants. The agreement targets digitalisation of electricity transmission, refurbishment of the Vau i Dejës hydroelectric plant and energy‑efficiency improvements at a university campus in Tirana. The projects aim to boost reliability, support renewable generation and bring Albania’s power market closer to EU standards.

Together, these deals illustrate a broader pattern of European states and development agencies channeling financing into Western Balkan nations to modernise power infrastructure, enhance grid resilience and accelerate the region’s energy transition toward renewable sources.