Sveti Stefan Hotel Complex PPP



Project number:


Business sector:

Property and tourism

Notice type:


Environmental category:


Approval date:

26 Oct 2010



PSD disclosed:

17 Sep 2010

Translated version of this PSD: Montenegrin

Project Description

The EBRD is considering providing a €37 million long term debt facility to Adriatic Properties D.O.O (the “Company”), to finance the re-development of a landmark tourist site on the Montenegro’s coast into a prime resort which will set a benchmark for low-density, sustainable tourism. The project is located on a land plot of 68,000 m2 which includes the Sveti Stefan peninsular village and some additional area along the Montenegrin Adriatic sea coast. The Project will be built in 2 phases.

  • Phase 1 will include the refurbishment of Milocer hotel (8 rooms and suites) and Sveti Stefan Island hotel (50 rooms and suites), as well as some infrastructure works, an administrative building and part of leisure facilities (restaurants, tennis courts and cafes), to create a new resort to be operated under the brand "Aman Resorts". The redevelopment of Milocer hotel has been completed and the hotel has been operating since January 2009. Sveti Stefan Island hotel is currently under renovation and is planned to be completed before the end of 2010.
  • Phase 2 will consist of the demolition of the existing Queens Beach hotel and subsequent redevelopment of a new Queen’s Beach hotel with up to 60 hotel rooms, as well as 60 villa apartments and Queens Beach spa to be operated under the brand “Chedi”. The second phase is expected to be completed in the course of 2012.

Transition Impact

The project is expected to generate strong transition impact due to the following:

  • Demonstration effect in setting a market benchmark for low-density and sustainable tourism. Due to its high visibility, the Project’s impact is expected to reach beyond Montenegro’s borders and set quality standards for the tourism industry in the Southern and Eastern Mediterranean region. Furthermore, through its Public Private Partnership structure, the project will set an example for future tourism privatisations in the region.
  • Increased competition in the region’s hospitality market which suffers from a significant lack of quality tourist accommodation.

Skills transfer deriving from the hotel operator (Aman Resorts)’s undertaking to retain part of the Company’s existing staff and development of a specific training programmes for them, as well as for new employees (mainly hospitality-related and managerial specialisations).

The Client

Adriatic Properties D.O.O., a special purpose vehicle, organised and existing under the laws of Montenegro and ultimately owned by the Restis group of companies. The Restis group of companies is one of the largest shipping groups in Greece. It is owned by the Restis family, which is headed by Mr Victor Restis. Adriatic Properties D.O.O. holds the development, operating and leasehold rights for the Project.

EBRD Finance

€37 million long term debt facility under A/B structure, with two separate tranches (one tranche per phase).

Project Cost

€92.6 million.

Environmental Impact

Screening categories and rationale for classification
Screened B (2008). The refurbishment/construction and operation of a hotel complex may be associated with some environmental and health issues, which are site specific and can be readily identified, assessed and mitigated.

Environmental and Social Due Diligence
Due Diligence including reviews of the technical report, completed Environmental and Social Questionnaire and the Bank’s environmental specialist’s visit covered the whole area of the client's land plot. The environmental and social due diligence to date did not identify any significant environmental or social issues.

The key findings to date include the following: (i) the project is consistent with the city's master plan and the country's low density tourism development strategy rather than mass tourism, and is complementary to the World Bank's on-going Sustainable Tourism Project; (ii) Sveti Stefan Island is a protected monument of culture of II category in the country, and the refurbishment work fully complies with the relevant regulatory requirements and has been conducted under the supervision of the Institute for Cultural Monuments Protection ; (iii) the project will benefit from the EBRD/World Bank supported Montenegro Regional Water Supply Project; (iv) solid waste from the project will be sent to the Podgorica's sanitary landfill which is the only operating sanitary landfill in the country; (v) waste water from the project will be addressed by the municipality of Budva concession project to construct a sewage network, a pumping station and new waste water treatment plants.

Environmental and Social Action Plan (ESAP) is currently being developed to ensure adequate mitigation measures are in place to comply with the requirements under the Bank’s Performance Requirements .

Implementation Requirements
The client is required to ensure that the project will comply with EBRD Performance Requirements and agree and implement an Environmental and Social Action Plan (ESAP) as well as submit annual report to the Bank on environmental and social matters. The Bank will monitor the project’s environmental and social performance by reviewing the annual environmental and social report and site visits where necessary and appropriate.

Energy Efficiency
The Client has worked with the Bank on identifying and exploiting sustainable energy opportunities in the Project. The energy performance assessment confirmed that the Project features some best available techniques such as energy saving lighting, integrated building management system for the Queen's Beach hotel and energy management system for the Sveti Stefan island facilities.

Solar thermal installations are under consideration and under investigation for compliance with national architectural protection regulations. Through these sustainable energy investments, the Project is better by 15.4% from the energy baseline, defined by requirements of national regulations.

Technical Cooperation


Company Contact

Milena Vukovic
Adriatic Properties d.o.o
Hotel Kraljičina plaža Miločer, Sveti Stefan, Budva, Montenegro
phone: +382 33 468 825
fax : + 382 33 468 577

Business opportunities

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