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February 2012

Bulgaria and Montenegro to Cooperate on Energy Montenegro gets Two Bids for Golf Course Projects Project Tender Sofia and Podgorica are considering setting up a joint company for the transfer of electricity to Italy after talks were held in Sofia between the Montenegrin Prime Minister, Igor Lukšić, and Prime Minister, Boyko Borissov. Following the meeting, the head of the Bulgarian government stressed that this venture would give Bulgaria the chance to enter the Italian energy market. Energy was the key subject of the bilateral talks. The Bulgarian National Electricity Company and the Economy and Energy Ministry have been working actively on drafting a long-term contract for the export of electricity to Montenegro. For his part, Borissov reiterated his country’s support for the bid made by the Western Balkan state to obtain EU membership. Montenegro gets €4 million EBRD Loan for Heating System Project The EBRD is helping to improve the energy efficiency of district heating systems in Montenegro with a €4 million loan to finance the construction of a new biomass-fuelled district heating energy system in Pljevlja, in the north-western part of the country. The heating facilities currently in use in Pljevlja are outdated and operate using brown coal. The EBRD loan will be used to convert the obsolete heating facilities in Pljevlja town centre into a ‘stateof-the-art’, centralized district heating system based on biomass.

LPGD, which was founded in Podgorica by Dutch Limon, submitted a better financial offer for the construction of a golf courses in Tivat than PM Golf Development. LPGD put forward a €11.3 million offer for the 90 year lease on Tivat Montepranzo along with a nine-year investment program of up to €181.6 million. It also offered an annual rent of 16 cents per square meter of land; 786,600 square meters were offered for rent by the government. The Tivat-based company, Porto Montenegro Golf Development, founded by Adriatic Marinas, was prepared to pay a total of €10.6 million and offered to pay an annual rent of 15 cents for every square inch of land. PM Golf Development announced a five-year capital investment program worth €10 million.

The total cost of the project cost is set to be € 6.5 million. The balance will be covered by a grant from the EU Western Balkan Investment Framework.

New Tender for Montenegro Steel Factory

Tenders Tender for Orjenski Batalion in Herceg Novi The government of Montenegro announced an invitation for tenders to bid for a long-term lease of 90 years for Orjenski Bataljon Barracks in Kumbor, Herceg Novi, to include both the construction and management of the facility. The tender process is aimed at experienced international investors with a proven financial capacity, along with experience in designing, constructing and operating large multi-purpose tourist resorts. Bids should be submitted no later than March 15, 2012, to the Ministry of Defense, to the Tender Committee for the Valuation of Former Military Property.

Tender for the Mamula Fortress in Herceg Novi The government of Montenegro announced an invitation for tenders to bid for the long-term lease of 30 years, with a possibility to extend up to 90 years, for the tourist resort of Lastavica Island on which is situated Mamula Fortress, Herceg Novi, to include both the construction and management of the facility. The tender process is aimed at experienced international investors with a proven financial capacity, along with experience in designing, constructing and managing complex tourist facilities. Bids should be submitted no later than 14th February, 2012 to the Ministry of Defense, to the Tender Committee for the Valuation of Former Military Property. Note: The regular session of the Privatization and Capital Projects Council was postponed because of the state of emergency declared in Montenegro due to the worst winter weather in decades that grasp the Balkans. For this reason, there is no information regarding the opening of the Bids for the tender for Mamula fortress available yet. •

Montenegro has received two offers for a long-term lease on a plot of land designated for the construction of a golf course. The offers were submitted by the companies Porto Montenegro Golf Development and LPGD Podgorica.

The name of the successful applicant will soon be made public. Limon was the top-ranked company 4 years ago, but the tender committee ended negotiations, claiming that it could not confirm the guarantees that had been put forward to support the investment program which was worth €205 million.

Bankruptcy Committee of the Steel Plant opened new tender for the sale of the whole property of the plant (land, construction facilities, plants and equipment, property that has the status of uncompleted investment, etc.) through public bidding under initial price of 21 million. The bids can be delivered until March 22, 2012. The public bidding will be held on March 26, 2012 at the premises of the Commercial Court in Podgorica. This is the second tender for this plan in this year. The plant went up for a sale under initial price of €30 million. However, Montenegrin Government received no bids following a preliminary call for the sale of insolvent steel mill Zeljezara Niksic. The majority of Niksic Steel Plant shares were transferred to MNSS BV in 2008, when the old company, under the same name, changed its headquarters and ownership structure. Since then, the former industrial giant has witnessed a decrease in the number of workers and an increase in the firm’s debts, the biggest share of which goes to its most recent owner. The bankruptcy of the steel plant, declared in April and confirmed in November 2011, was met with dissatisfaction by the company’s workers. This is the fourth time shares in the Niksic plant have changed hands. Companies from Russia and Great Britain previously held shares.

Sultan Corporation Expects to Re-open Montenegro’s Brskovo Mine The Australian mining company, Sultan Corporation, expects to re-open a disused Montenegrin mine, Brskovo, within four years having verified the existence of zinc, lead, copper and silver deposits. Samples of deposits that were found at Brskovo, in the eastern part of the municipality of Mojkovac, were confirmed following three months of exploratory activities. Exploratory drilling will continue for the next two-three years. Sultan Corporation holds a 25-year exploration and mining lease for the Brskovo lead and zinc complex.

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