A senior loan of up to EUR 50 million in the form of a Standby Credit Line (SBCL) in favour of Deposit Protection Fund of Montenegro (DPFM), an independent public institution, fully guaranteed by the state of Montenegro. As a stand-by credit line, the EBRD finance is designed to provide immediate funds to DPFM under certain pre-agreed conditions in order to support pay-outs of insured deposits in case of bankruptcy or resolution of a member bank in Montenegro. The new facility will replace the existing SBCL of EUR 30 million, so that the DPFM continues to have a back-up liquidity line.
The Project will enable DPFM to have adequate emergency funding arrangement in place to restore an efficient and credible protection for individual depositors and improve financial safety net in Montenegro. The Project additionally aims to strengthen DPFM's asset and investment management capabilities up to international standards through transactional TC assignment.
ETI score: 69
The expected transition impact of the project is its contribution to the Resilient and Well-governed transition qualities. The project will contribute to the Resilient quality by improving Fund's deposit coverage ratio which will strengthen DPFM's ability to withstand any potential bank failures and continue maintaining high confidence in the Montenegrin banking sector. The project will also support the Well-governed quality through technical assistance programme focused on asset and investment management practices that will allow DPFM to align its existing arrangements with international standards.
DEPOSIT PROTECTION FUND OF MONTENEGRO
Deposit Protection Fund of Montenegro is an independent public institution established in 2004 based on the Deposit Insurance Law in Montenegro designed to provide deposit insurance to all eligible depositors that hold accounts with member banks.
EBRD Finance Summary
Total Project Cost
Additionality is generated from financing structure and risk mitigation. The Project will provide an emergency back-up financing facility, which is currently the only access to emergency funding for DPFM. The Bank's involvement through the Project will enhance the Fund's investment management practices up to best international standards.
Environmental and Social Summary
Categorised FI (ESP 2019). This is a Deposit Protection transaction with an existing client of EBRD. Since there are no adverse environmental and social issues associated with the DPFM's activities, environmental & social management systems as per PR9 are not required. The client will continue to report annually on environmental and social matters, with a main focus on PR2 and 4 reporting.
Technical Cooperation and Grant Financing
Institutional Capacity Building Programme of up to EUR 94,544 comprises of implementation of new investment strategy, selection of experienced asset management company and training of staff.
Company Contact Information
+382 20 210 466
+382 20 210 436
Miljana Vukova bb 81000 Podgorica Montenegro
PSD last updated
27 Aug 2020
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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Environmental and Social Policy (ESP)
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More information on the EBRD’s practices in this regard is set out in the ESP.
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
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Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email firstname.lastname@example.org to get guidance and more information on IPAM and how to submit a request.