Montenegro Energy Tenders for Foreign Companies

Montenegro is preparing new renewable energy capacity and strengthening its electricity grid. For foreign developers, equipment suppliers and infrastructure contractors, success subsequently depends on preparing the tender, tax and local operating model together from the start.

Montenegro's energy sector is entering an important delivery phase. The country has adopted a more market-based framework for renewable energy, published a three-year auction plan and continued work on grid connections with neighbouring markets. At the same time, publicly owned energy companies and international lenders are preparing or financing transmission, generation and energy-efficiency projects.

This creates opportunities for international developers, engineering companies, contractors, equipment suppliers and specialist consultants. Yet Montenegro is not a market where a technically strong proposal alone is enough. Tender documentation, corporate structure, tax treatment, local employees and project accounting can all affect whether a bid is accepted and whether a winning project remains profitable.

A market built on hydro power with room for solar and wind

Montenegro already produces electricity from a diverse group of sources, but hydro power remains dominant.

Montenegro is also becoming more important as a regional electricity transit route. The undersea connection with Italy and the links with neighbouring Western Balkan systems give grid development a commercial importance that goes beyond Montenegro's domestic demand.

In early 2026, Montenegro adopted the electricity-market integration legislation needed before coupling with the EU internal electricity market. The Energy Community Secretariat considers EU market coupling by early 2028 plausible, but only after the legislation has been verified and the required contractual and technical work has been completed.

Renewable auctions are creating a visible project pipeline

The Government's three-year incentive plan for 2026 to 2028 provides for market-premium auctions covering 450 MW in total: 250 MW for solar and 200 MW for wind. The published plan scheduled a solar auction for the first quarter of 2026 and a wind auction for the third quarter. Both are designed as location-neutral auctions, meaning that bidders must bring forward suitable projects rather than compete for one pre-selected government site.

The first solar auction also offers a valuable lesson. The 2025 call attracted interest: eleven companies purchased the tender package and four submitted offers. However, all four offers were rejected. The authorities stated that a new call would be prepared with improvements to the tender documentation.

Grid investment will generate work beyond generation projects

Renewable projects need transmission capacity. In February 2026, the European Bank for Reconstruction and Development approved a sovereign-guaranteed loan of up to EUR 15 million to CGES, Montenegro's transmission system operator. The project concerns the 95-kilometre Montenegrin section running between Bosnia and Herzegovina, Montenegro and Albania.

This example illustrates the wider opportunity. The energy transition requires more than solar modules and wind turbines. It also requires substations, conductors, civil works, control systems, cybersecurity, metering, engineering, environmental services, maintenance and specialist project management.

Prepare the local business model before submitting the bid

The tender team often focuses first on price, experience and technical delivery. Those are essential, but several practical business questions should be answered before the bid is finalised.

•  Who will sign and perform the contract? A foreign head office, a Montenegrin branch, a local subsidiary or a consortium can lead to different registration, tax, liability and reporting consequences. A local company should not be formed automatically, but the intended structure should be workable if the bid succeeds.

•  Could the project create a permanent establishment? A site, project office, local management presence or long-running construction activity may create a taxable presence. The answer depends on Montenegrin law, the applicable double tax treaty and the actual way the project is delivered.

•  How will VAT, customs and withholding tax affect the price? Imported equipment, local installation, cross-border services, advance payments and subcontracting can all have different treatment. A financing source or government counterparty does not by itself guarantee a tax or customs exemption.

•  How will people work legally in Montenegro? Foreign engineers, supervisors and project managers may need residence and work permits. Local payroll registrations, employment documentation and salary reporting should be included in the mobilisation plan.

•  How will the project be accounted for? Milestone invoices, advances, retention amounts, bank guarantees, subcontractor costs and imported equipment must be recorded consistently. Public and lender-financed projects also tend to require a clear audit trail.

•  Are group charges properly supported? If a Montenegrin entity receives engineering, management, financing, equipment or intellectual-property support from related companies, transfer-pricing and withholding-tax questions may arise.

These are not matters to solve after award. They affect the bid price, cash flow, contract negotiations and qualification evidence.

Local preparation can become a competitive advantage

Ekonomik Accountants support foreign energy companies and infrastructure contractors from the early tender stage through local establishment and project delivery. Our work can cover company or branch formation, tax and permanent-establishment analysis, VAT and accounting compliance, payroll and HR administration, residence and work permits, transfer pricing and coordination with foreign headquarters and advisers.

If your company is considering an energy tender or public infrastructure project in Montenegro, contact Ekonomik Accountants at contact@ekonomik.me before finalising the bid structure and price.

This article reflects publicly available information reviewed September 2026. It is intended as general information only. Tender conditions, project timetables and tax consequences must be assessed for each specific opportunity.