New EBRD financing for rehabilitation of Montenegrin rail network

By Ina Coretchi

The EBRD is reinforcing its support to the modernisation of transport infrastructure in Montenegro with a €15 million sovereign loan for the rehabilitation of the Montenegrin rail network.

The credit is being made available to, ZCG Infrastruktura, a company majority owned by the Montenegrin state and which manages the country’s rail track infrastructure, operating a 250 km network.

The EBRD loan will be used to finance the rehabilitation of the rail tracks on a 57 km rail branch between the industrial Niksic region, in the central part of the country, and the capital Podgorica, providing improved transportation links further to the Port of Bar and to the European rail network in the southern part of the country.

The project is also supporting the overall reform of the railway sector in Montenegro by helping ZCG Infrastruktura pursue its own restructuring programme. It will increase transportation safety on the important Niksic – Podgorica segment of the rail network.

The sovereign guaranteed loan to ZCG Infrastruktura will be complemented by €950,000 in grant funds provided by the EBRD’s Western Balkans Fund and its Shareholder Special Fund, as well as by the government of France. The grant financing will support project development and implementation.

“The EBRD is pleased to contribute to further modernisation of rail infrastructure in Montenegro and to support the operational efficiency of ZCG Infrastruktura. This project represents an important step in the progress of the country’s rail sector reform”, said Marek Loric, Head of EBRD Podgorica Office of the EBRD.

"Montenegro has once again demonstrated its commitment to the idea of modernisation and improvement of the railway network in the country. This particular investment will increase the level of safety and security of the railway and will contribute to the continuation of the reform in the railway sector. This loan will enable the completion of the railway from Podgorica to Niksic, which will significantly contribute to the comprehensive development of Montenegro", said Zarija Franovic, President of the Board of Directors of the Railway Infrastructure of Montenegro.

Previously the EBRD has provided €15 million for the upgrade of the rail infrastructure in Montenegro.

Overall, since the beginning of its operations in Montenegro the EBRD has invested over €80 million in various sectors of the country’s economy.