EBRD finances upgrade of Montenegro’s strategic Bar railway link

• €50 million EBRD sovereign loan to modernise Golubovci-Bar railway section
• Loan complements financial package already extended by European Union and European Investment Bank
• Investment will improve rail safety, reliability and regional connectivity

Montenegro’s main railway connection between the Port of Bar, Podgorica and the border with Serbia is set to become safer and more reliable thanks to investments supported by the European Bank for Reconstruction and Development (EBRD).

A €50 million loan from the EBRD will allow Montenegro’s state-owned railway company to finance rehabilitation works on the 39 km Golubovci-Bar section of the line. The works will include renewing the tracks, three railway stations and 11 bridges, as well as upgrading signalling, telecommunications and power-supply systems. The investment is expected to improve journey times and safety, reduce operating and maintenance costs, and encourage a shift from road to rail, helping to reduce transport-related carbon emissions.

The project forms part of a wider investment supported under the Western Balkans Investment Framework. Alongside the EBRD financing, the European Union (EU) is providing €112.6 million in grants, while the European Investment Bank (EIB) is contributing a €63 million loan.

Grzegorz Zielinski, the EBRD's Managing Director for South-Eastern Europe, said: “Modernising this vital railway connection will make travel and freight transport safer, more reliable and more sustainable. By linking the Port of Bar more efficiently with the rest of Montenegro, neighbouring Serbia and the wider European market, the project will support trade, regional integration and the country’s transition to a greener transport system.”

Montenegro’s Finance Minister, Novica Vuković, said: “This is not merely an investment in 39 kilometres of railway track; it is an investment in Montenegro’s future, its connectivity with the region and Europe, and a stronger economic foundation for future generations. It is particularly significant that we are implementing this project with the strong support of our European partners – through a combination of loans and grants – demonstrating that Montenegro recognises its development priorities and secures high-quality, sustainable funding sources for them. We will continue to manage public finances responsibly and create the conditions for capital investments to translate into better infrastructure, greater economic potential and a higher quality of life for our citizens. The modernisation of the Golubovci-Bar railway represents an important step in that direction and confirms our determination to forge stronger infrastructural and economic ties between Montenegro and Europe.”

Bernard Brunet, Head of Cooperation at the EU Delegation to Montenegro, added: “The modernisation of the Golubovci-Bar railway is an important priority for the EU, as this line is part of the Trans-European Networks. The development of modern rail lines will improve Montenegro’s connectivity with its neighbours and wider European markets, while encouraging more sustainable and decarbonised transport. In addition, the combination of grants from the European Commission and loans from the EIB and the EBRD demonstrates the added value of a Team Europe approach and our capacity to finance large investment projects for the benefit of the citizens and companies of Montenegro. With the signing of this loan, the conditions are now in place for a swift start to the works and the sustained modernisation of this strategic railway line.”

Minister of Transport Radoš Zečević stated: "The reconstruction of this important section will contribute to creating better conditions for passenger and freight rail transport, as well as a modern and more reliable railway infrastructure that will serve the citizens, the business sector, and the overall economic development of Montenegro."

Alongside the infrastructure works, the project will advance railway-sector reform and strengthen institutional governance. Technical assistance will support the development of Montenegro’s newly established independent Railway Agency and help improve the railway operator’s cybersecurity systems in line with internationally recognised standards.

The EBRD has supported the modernisation of Montenegro’s railway sector since 2007, providing three loans totalling €51 million for infrastructure rehabilitation and emergency works, as well as financing for railway maintenance equipment. The Bank has also supported sector reforms aimed at improving safety and operational efficiency, strengthening corporate governance and aligning the railway sector with international standards.