The World Bank last week approved a US$5 million Learning and Innovation Credit (LIC) for the Emergency Stabilization of Electricity Supply Project in Montenegro, a constituent republic of the Federal Republic of Yugoslavia.Through remote metering, automated billing and demand-side management in pilot areas, the project will test whether consumers will reduce the illegal use of electricity and increase their payments, which would contribute to an overall reduction in the wasteful use of electricity and restore payment discipline.
"This credit will help the Montenegro Electric Power Company (EPCG) reduce distribution losses and improve financial management capacities," says Dejan Ostojic, World Bank team leader for the project. "The project will introduce new metering technology, which will increase the efficiency of electricity supply and improve service to consumers. Due to its flexibility, the new metering and billing system will help consumers benefit from a modern tariff system, while strengthening the company’s financial condition."
It is estimated that commercial losses of EPCG account for about 10 percent of the total distribution demand, which bring financial losses to about US$7 million per year. Introducing remote metering and automated billing in pilot distribution areas will enable EPCG to test the potential to reduce commercial losses and improve collection. New electronic meters at the consumer level will enable remote reading and disconnection, as well as automatic protection against tempering with meters, thus helping EPCG to identify and locate the sources of commercial losses.
The project will also finance supply and installation of a computer-based management information system, which is the first step in establishing a modern financial management system. This will assist EPCG in automated information exchange and analyses of critical data related to sales and billing, collections, technical and commercial losses.
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