THE PRICE FOR THE PROJECT UNIT II OF TPP 'PLJEVLJA' AGREED UPON

The Work Team for implementation of the project Unit II of Pljevlja thermal power plant, consisted of representatives of the Government, Elektroprivreda and Pljevlja Coal Mine, and representatives of the Czech Company Škoda Praha have harmonized the final price for the Project Unit II. Škoda Praha has been required to implement the project on construction of the Unit II at the price of €324.5 million, in line with the agreed EWA and EPC contracts (Early Works Service Agreement and Contract on Execution of Works) and parameters required by a tender procedure.

Based on the proposed technical solution, Škoda Praha will comply with guaranteed terms and conditions of EU standards for coal combustion (PC) technology in TPP-II. The modern best available techniques (BAT) are planned to be applied, including all the activities on cleaning of waste gases in accordance with the DIRECTIVE 2010/75/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of November 24th 2010 on industrial emissions (Integrated pollution prevention and control):

SO2 emissions: not exceeding 150mg/nm3,
NOx emissions: not exceeding 200 mg/nm3 ,
Dust emissions:10 mg/nm3

Furthermore, the Czech Company has confirmed that this proposal also includes the plant for selective catalytic reduction (SCR) of nitrogen oxides, in case more rigorous international standards appear in future.

Let us remind you that 13 Invitations for Bids were sent in June 2013, in addition to definition of technical and commercial parameters and conditions for achieving partnership relationship for this project. Following intensive discussions and explanations, there were nine bids in total received by the end of October of the same year. The concerned bids having been evaluated based on already defined criteria, the most favourable preliminary bid was finally obtained in April 2015 - the bid prepared by the Czech Company Škoda Praha worth €338.5 million.

During the previous period, starting from the preliminary price and taking into consideration requirements of EPCG and the Work Team for additional works and additional more quality technical terms and conditions, the price preliminary offered by Škoda Praha reached the level of €359.4 million, i.e. €349.2 million offered by representatives of the Montenegrin Work Team. Taking into consideration the concerned request of the Work Team for additional works and more quality terms and conditions presented in draft contracts and annexes, the final proposal for the total price has been harmonized yesterday by reducing the initial price by around €25 million.

Following adoption of the interstate agreement between Montenegro and the Czech Republic and official confirmation of the contract by two parties, the Work Team will forward all the necessary documents to the Board of Directors for its approval, as envisaged by procedures, and the Board of Directors will forward them at the end of August to shareholders of EPCG, in their capacity of the competent authority to adopt these documents, thus fulfilling, formally and legally, all the conditions for signing of the contract and commencement of the works on implementation of this Project.