Energy Responsibility: Investing in the Future for Economic Growth

1. The Government of Montenegro Deputy Prime Minister for Economic Policy Energy: Responsibility for the Future Vujica Lazovic, PhD 5th VIENNA ECONOMIC FORUM Investment Possibilities in The Countries from The Adriatic to The Black See and Caspian Region– TAKE THE REAL CHANCE

2. Energy is power that makes the world go round • Energy is the basis for production growth • Energy could generate economic growth by itself.

3. But… • …consequences of using and producing energy made us to be energy responsible.

4. What does it mean to be energy responsible? It means to be responsible towards nature, society and individuals • Use energy without endangering natural balances; • Provide continuous economic, scientific and technological development; • Provide enough energy for future generations.

5. Energy responsible to nature! Different levels of scientific and technological progress Different levels of creative forces and production relations Different levels of relations between nature and society Rational use of natural resources

6. Energy responsible to society! Market economy makes contradictions between society and nature: On one side, the bigger consumption and higher demand require bigger production, thus greater consumption of energy. On the other side, unsafe nature is not favorable environment for business. Living environment has become a significant element of the standard of living.

7. Energy responsible to individuals: Harmonization of demographic changes pointing average growth, with exploitation of natural resources and technological progress.

8. Montenegro approach to energy reasonability • Montenegro, as ecological state anddeveloping economy, has recognized its national interest in sustainable development of both energy sector and economy as a whole. • Energy Community Treaty, under the same rules of energy policy, integrates EU and countries of the South-Eastern Europe.

9. Strategy of Energy Sector Development of Montenegro until 2025 Current: Energy importdependence (46%) and significant natural energy potential. Perspective: Energy independence and preservation of natural environment. Energy investment in Montenegro is a business challenge for the state and private sector.

10. Additional positive signals to energy investors • euro as official currency, • favorable tax policies, • openness to flow of goods and capital, • elimination of business barriers.

11. Shortage of fossil fuels and political impact on their prices has macroeconomic implications. • domestic energy production, • models of public-private partnership, • renewable sources of energy and use of pure technologies in exploitation of fuels.

12. Energy Projects • Project of capital increase of Electricity Company of Montenegro • Project of big hydro power plants construction • Project of joint venture in the second block of Thermo Power Plant Pljevlja • Projects of wind farms • Programs and projects of natural gas exploitation in the off shore and on shore

13. Additional impulse to investors’ confidence-recent economic trends in Montenegro (jan-jun 2008): • Real GDP growth rate: 8%, • Inflation: 6.7%, • Unemployment rate: 10.7%, • FDI growth rate: 15% (2007: 1 billion € or 1600€ per capita), • Reduction of taxes and contributions by the year 2010.

14. Using domestic energy, particularly renewables, we raise the country competitiveness; create new jobs; open doors to new technologies and know-how.

15. Summary, good energy policy is able to find optimal level of : • Energy productivity, • Energy responsibility, • Energy sustainability.

16. The Government of Montenegro Deputy Prime Minister for Economic Policy Thank you for your attention! vujica.lazovic@gov.me