Montenegro is preparing a roughly €50 million energy-transition programme for the northern town of Pljevlja with the World Bank, targeting renewable heating, district-heating expansion and household energy efficiency as the coal-dependent municipality begins planning for a lower-carbon economy.
Government documents published on Sept. 3 outline the proposed Montenegro Just Energy Transition, or M-JET, project, which could be implemented over about five years.
The preliminary investment structure allocates around €24 million for a renewable heat-production facility, €20 million for expansion of Pljevlja’s district-heating network, €5 million for household energy-efficiency and cleaner-heating measures, and about €1 million for technical assistance, supervision and project implementation.
The financing package has not yet been finalised.
Montenegro is considering a World Bank loan, potentially supplemented by grants from the Western Balkans Investment Framework, which could cover up to 30% of eligible investment costs.
A project-preparation grant of around $2 million-$2.5 million is also being considered.
The preparation phase could begin in 2027, with feasibility studies, environmental and social assessments and technical documentation expected to continue into 2028.
The project is designed around Pljevlja because the town is at the centre of Montenegro’s coal industry and hosts the country’s only thermal power plant.
The Pljevlja power plant, operated by state utility EPCG, remains an important part of the national electricity system but also one of Montenegro’s largest sources of carbon emissions.
The municipality is therefore expected to face some of the country’s largest economic and employment challenges as Montenegro aligns its energy sector with EU climate policy.
District heating is one route to reducing local dependence on individual coal and wood-fired heating while improving air quality.
A renewable heat source combined with an expanded municipal network could also reduce household energy costs and create a new market for engineering, construction, heating equipment and energy-services companies.
The preliminary programme is likely to generate procurement opportunities for feasibility and design consultants before larger construction tenders emerge.
Environmental consultants, district-heating specialists, civil contractors, equipment manufacturers, supervision firms and energy-efficiency providers could all eventually participate.
But the project remains at an early stage.
Its final size, financing structure, procurement timetable and technical design will depend on World Bank appraisal, government approvals and the availability of grant financing.
The programme nevertheless adds a significant new investment pipeline to Montenegro’s energy transition.
While much of the country’s recent energy investment has focused on wind, solar and transmission infrastructure, M-JET would direct more funding towards the social and municipal consequences of moving away from coal.
For Pljevlja, that could make the programme one of the first large-scale tests of whether Montenegro can combine decarbonisation with local economic investment rather than treating the transition only as an electricity-sector issue.
