What’s Behind The Italy-Montenegro Energy Deals?

When Italy’s Prime Minister, Silvio Berlusconi, on his visit to Montenegro in March 2009, announced his ambition to make Italy “if not the first, then the second largest investor in Montenegro, after Serbia”, Italy was not even in the top ten of investors in the country.

Just a year later, Italy became the number one investor in Montenegro, as large, partly state owned Italian companies in the energy sector started investing in the Balkan state.

But suspicions of corruption and accusations of irregularities spread fast as the media, civil sector groups and opposition parties kept pointing to the lack of transparency in each step of the Montenegro-Italy power deals.

On one hand, the governments of both countries and investors have kept promoting the idea that this strategic partnership will turn Montenegro into the energy hub of the Balkans - and Italy into the energy hub of Europe - and that the deals will bring great benefits in terms of lower energy prices and more secure networks.

On the other hand the media, civil sector groups and the political opposition on both sides of the Adriatic claim that “purely private interests” are at work, and that the projects are reckless and will negatively impact on the environment far more than they benefit the citizens of either country.

In Montenegro opponents of the deals also worry that the establishment of an Italian monopoly in the energy sector will cause energy prices to rise.

Italy’s official motive to invest in Montenegro’s energy sector is to import cheaper “green” energy from Montenegrin hydropower plants as well as from other neighbouring countries in order to satisfy EU goals concerning levels of renewable energy consumption by 2020.

According to the Montenegrin and Italian media, prosecutors in both countries have received charges related to the Italian energy investments in Montenegro. According to the Italian daily Repubblica, Pescara prosecutors have since last November been investigating alleged irregularities in the project of the Italian company Terna to lay a 760 million euro underwater cable from Montenegrin and Balkan hydropower plants to Italy.

Montenegro’s opposition Pokret za Promjene [Movement for Changes] filed charges in February against Italy’s Berlusconi, Montenegro’s former prime minister, Milo Djukanovic, and various other Montenegrin officials, accusing them of fraud in energy deals.

But Pescara prosecutors have not yet confirmed nor denied the existence of such an investigation while the charges filed by Pokret za Promene have not yet led to any action by Montenegro’s public prosecutor.

Thus, it remains to be seen whether the suspicions surrounding the Italy-Montenegro energy deals will ever be examined in a court of law, and, if so, to what extent.

In the meantime, Italy continues to seal strategic partnerships with governments throughout the Balkans, obliging to pour hundreds of millions of euro into producing energy from Balkan rivers and then exporting it back through Montenegro to Italy.