1. Milija Čabarkapa NGO Green Home Steps towards sustainable development of small hydropower plants in Montenegro

2. Project: “Strenghtening of administrative and legal framework for sustainable hydropower in Montenegro” Objective: Improvement of procedure of planning and approving sHPP Implementation team: Natasa Kovacevic and Milija Cabarkapa, Green Home, mr Petra Remeta, WWF and mr Lucija Rakocevic, consultant Manner: - Section of condition of contract/procedures of sHPPs in Montenegro - Review of procedures in countries of the EU - Meeting with stakeholders - Defining main/priority issues - Proposal of manner for improvement of procedure.

3. Trends of hydropower development (Montenegro) 67% of production of electricity is from hydropower (two hydropower plants and eight small hydropower plants) National objective for OIE- 33% of share of OIE in overall energy consumption up to 2020 Small hydropower plants are presented as sustainable distribution source of electricity with added value of local development of the north of Montenegro.

4. Planned development of sHPP in Montenegro National action plan of renewable energy sources 201520162017201820192020 [MW][GWh][MW][GWh][MW][GWh][MW][GWh][MW][GWh][MW][GWh] < 1 MW4,5144,5146,820,311,235,111,235,111,235,1 1–10 MW2988329638,5113,781,6238,986,3251,986,3251,9 Overall sHPP33,510236,511045,313492,827497,528797,5287

5. Currently planned and approved project of sHPP almost equal to the planned by 2020 EPCG sHPP [MW] EPCG sHPP planned reconstruction (2016) [MW] sHPP approved by tenders 2007 -2014 [MW] sHPP approved by energy permit [MW] Overall[ MW] < 1 MW1,21,55,88,716,0 1–10 MW7,99,968,9 78,8 Overall sHPP9,111,474,78,794,8

6. Review of approved projects According to the municipalities No.MunicipalityNumber of riversNumber of sHPPP (MW)E (GWh) 1.Kolašin91110,133,0 2.Mojkovac110,62,5 3.Andrijevica5822,374,4 4.Berane31019,962,2 5.Bijelo Polje224,113,7 6.Plav4717,254,2 7.Gusinje113,05,7 8.Plužine125,420,3 9.Budva110,953,2

7. Phase of implementation of sHPP project Projects sHPP are implemented in four main phases: planning approving construction exploitation This project is focused on two phases: Planning phase- strategic planning in the field of energy, water management, environment, construction etc. Approving phase- approving concrete project from the aspect of energy, water use, environment and construction On the basis of analysis of procedures, ten issues were defined that need to be solved as soon as possible with the aim of redirection of development of sHPP on sustainable track.

8. Issues in current practice 1/10 Issue: Lack of water management basis Explanation: The Law on Water defines the obligation of adoption: -water basis ( ten years) -water management plans (six years) -water information system and -water cadastres Water management basis of the Republic of Montenegro from 2001 currently exists Solution proposal: Prepare and adopt water basis and other obligational water management basis in accordance with the Law on Water.

9. Issues in current practice 2/10 Issue: Lack of cadastre of watercourse with ecological and energy characteristics Explanation: Hydrological measures and analysis for need of construction of sHPP are done according to the need on the basis of initiative of stakeholder Cadastre of small watercourses in 13 municipalities is realized in 2012 in cooperation with ZHMSCG and funded by EBRD-it is not publicly available There is not analysis of watercourses for construction of sHPP from the aspect of environmental impact Solution proposal: Expand existing cadastre of small watercourses with hydrological and data on the need of environmental protection, data on ecological and hydromorphological status of water body

10. Issues in current practice 3/10 Issue: Lack of annual or years-long planning of dynamics of use of watercourses in energy purposes Explanation: Currently there is no legal obligation of adoption of documents that define watercourses and parts of watercourse that are planned to be used for operation of newly planned energy facilities There is need for defining this dynamics with the aim of preparation of basis and work capacities of institutions that approve realization of sHPP (environment, electric power, spatial planning etc) Current dynamics of approving projects is not compiled with strategic plans Solution proposal: The Law on Energy should define obligation of preparation of three-year plan of development of sHPP

11. Issues in current practice 4/10 Issue: Incomplience of legal regulations and/or their implementation Explanation: The Law on Spatial Planning and Construction is defined as “one- stop-shop” procedure for obtaining UTC and construction permit. Other laws define their procedures for obtaining specific approvals necessary for construction of energy facility that are not compiled with previously mentioned law (for example energy, environment, etc) It is not clear which approvals and conditions are necessary in order to start with the construction of energy facilities. Solution proposal: Define list of approvals and unanimous procedure in order to start the construction of energy facility.

12. Issues in current practice 5/10 Issue: Insufficiently clear defining of responsibility of concessionaire and grantor Explanation: Five Concession Agreements were terminated, for four out of five Agreements bank guarantee is not charged, even two Agreements were terminated by mutual agreement although risk i.e. obligation was at concessionaire, according to the Agreement. Technical solutions define manner and amount of using water resource, i.e. concession boundaries. Currently, implemented procedure provides changes of technical solution by obtaining construction permit, which disables transparent monitoring of manner of implementation of sHPP project. Solution proposal: It is necessary to clearer define responsibilities of concessionaires and grantor by the Concession Agreement, with the focus on issues that led to the termination of Agreement.

13. Issues in current practice 6/10 Issue: Low capacity of institutions responsible for management of water and energy resources Explanation: Eight years after adoption of obligation from the Law on Water, water management basis are not prepared. Necessary increase of capacity and number of experts who work in water management sector of Montenegro. Energy development strategy of Montenegro by 2030 was adopted in 2014 with data from 2010. Five-year action plan of implementation of the Strategy does not exist since 2012. National action plan OIE was adopted for the period of six years, instead of minimum ten years in accordance with the Law on Energy. Solution proposal: Define short-term and long-term plan of increasing capacities in the field of water management and energy, at which sustainable development in Montenegro is based.

14. Issues in current practice 7/10 Issue: Monitoring, reviewing and quality defining strategic objectives in the field of energy Examination: Lack of annual reports on implementation of the Strategy and Energy Action Plan. Energy development strategy of Montenegro by 2030 does not questioning deadlines and objectives from the previous study. Question reasons and manner of planning of implementation of energy projects, depending on changes in energy sector, technologies and politics (for example, sHPP as distributive source). Solution proposal: Preparation of annual reports of implementation of objectives from the Strategy and the Action Plan. Preparation of quality Action Plan including current activities and issues.

15. Issues in current practice 8/10 Issue: Preventing allocation of responsibility/ control of procedure to one institution Explanation: In countries of the EU, more and more institutions are involved in the proces of initial approval of project, in order to approve only those projects that have greater possibility of implementation. Lack of strategic and planning documents and cadastres lead to possibility of control of approving projects by one institution. Lack of publicly defined methodologies for calculation of criteria according to which projects are approved leads to non-transparent procedure and possibility of control of that procedure. Solution proposal: Publicly available cadastre of watercourse with clear criteria and conditions for using specific locations

16. Issues in current practice 9/10 Issue: Greater involvement of public during planning/ approving the project Explanation: For projects approved through public tender, public can involve in the process of discussion of concession act and during discussion on local level on environmental impact assessment For project approved through energy permit, public can involve only through non-transparent published request for obtaining energy permit at website www.oie-res.mewww.oie-res.me During realization of project, issue arises since public is hardly involved in defining optimal solution. This is especially expressed since there is lack of water management basis or cadastre. Solution proposal: Prepare and adopt three-year plan of development of sHPP on the basis of public discussion and compliance of conditions and criteria from the aspect of impact on environment and water use

17. Issues in current practice 10/10 Issue: Incompliance of strategic plans and harmonization of policies of sector of energy, water management, environment, spatial planning and construction Explanation: Distributed energy sources, such as sHPP, are implemented at local level and favorited because of possibility of integration with other development aspects with less impact on environment. In order to realize sHPP in that way, overlapping of sectoral strategies and policies of development is necessary, during preparation of strategic documents. During approval of sHPP projects, representatives of other sectors should be included with the aim of approving only those projects that are optimal from various aspects, not only from energy aspect. Solution proposal: Strategic planning of development of distributive sources and sHPP should involve other sectors as well, as this sector should be included during defining the manner of water use, environmental protection, spatial planning etc

18. Thank you for attention!