By Fedja Grulovic and Petar Komnenic
PODGORICA (Reuters) - With its scenic Adriatic coastline, pristine waters and rugged mountains, Montenegro has presented itself as a green paradise for holidaymakers and investors.
Yet plans to award a 30-year concession for the construction of four hydropower plants could risk harming that image as environmentalists mount a campaign warning about the impact on a local lake, birds and greenery.
The planned dams in Moraca River with the total capacity of 242 megawatts would reduce the country's dependency on imports with the Balkan country's biggest investment in power production in 20 years. Yet the conservation group WWF said that the project could cause serious environmental damage.
"We are potentially going to destroy high levels of biodiversity," said Chantal Menard, a WWF spokeswoman. "The biggest concern we have is that the plan is going beyond any EU rules."
Montenegro, which gained independence from Serbia in 2006 and generates about a quarter of its GDP in tourism, applied for European Union membership last year.
A WWF report said the project could cause "the inundation of the canyon upstream of the dams would cause permanent loss of the habitats" including eagles, hawks and owls. The group added flooding will destroy trees and kill some fish species.
WILD BEAUTY, BUT SHORT OF POWER
With very little industry, Montenegro is proud of its nature and advertises itself with the slogan of "wild beauty." The constitution defines Montenegro as an ecological state.
Yet it still suffers from a shortage of electricity, which means that power sometimes goes off even at the height of the tourist season.
The country plans to import around 817,000 megawatt hours of electricity in 2010, which makes up one third of the country's power needs. The electricity comes mostly from Bosnia and some from Serbia. The four hydroplants could produce up to 730,000 megawatt hours each year, sharply reducing dependency.
A government-sponsored consultant carried out a study that gave a green light for the project, saying it would not have a huge impact on the environment.
"The major focus of this study was the impact of planned accumulation on lakes and biodiversity of this area, on hydrology, climate, air, cultural heritage and scenery," Environmental Minister Branimir Gvozdenovic said.
The government does concede that the project will destroy 10 bridges, including an Ottoman one from 18th century. Hundreds of people will have to move from homes that will be flooded or left isolated on a mountain peak.
"People must get compensation for their land and the infrastructure should be improved, not damaged with this project," said Vuk Rakocevic, a resident of the impacted area.
There is also a risk that the 13th-century Moraca monastery -- a tourist destination because of its frescoes -- might be affected by flooding. Although the government says the structure will be safe, the Orthodox church is afraid water levels could come as near as the monastery door.
Monastery priest Velibor Dzomic said the church understands the need for new power production capacities.
"But we need to know if the government is going to be behind this project. Foreign companies will come and go. This is not a game." (Writing by Ivana Sekularac. Editing by Adam Tanner and Paul Casciato)
