Japan's Mitsubishi Heavy Industries Ltd signed a 70 million euro ($91.86 million) deal with Montenegro's government for the construction of a 50-megawatt wind park in the Adriatic state.

Montenegro's Deputy Prime Minister Branko Lazovic said the government was also studying whether it would be possible to expand the capacity of the planned wind park at Krnovo, some 50 km west of Podgorica.

"We hope the study will show that we can increase the capacity with an additional 22 megawatts," he told journalists.

Montenegro, which has had little investment in new generating capacity in 30 years and imports one third of its annual power needs, has said it will issue licences for wind farms with a total capacity of 100 megawatts by 2025.

To spur investment, in January the government granted feed in tariffs of 9.6 euro cents per kilowatt hour of energy produced in wind farms and between 4 and 11 euro cents for power produced in mini hydropower plants over the next 12 years.

Earlier this year, Montenegro issued a tender for construction of four hydropower plants on the Moraca river, with total capacity of 242 megawatts, to reduce dependency on imports.

China's Sinohydro Corporation, Italy's Enel , Germany's Strabag International GmBH and a consortium led by Italy's A2A are all on the government shortlist for this project, estimated at 600 million euros.

In July the government also signed a 60-million-euro contract with Spain's Fersa Energia for a 46-megawatt wind park on the coast. (Reuters)