Project Description
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.
Project Objectives
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.
Transition Impact
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.
Client Information
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
EUR 50,000,000.00
Total Project Cost
EUR 50,000,000.00
Additionality
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
Predrag Markovic
fzd@fzdcg.org
+382 20 210 466
+382 20 210 436
http://www.fzdcg.org/
Miljana Vukova bb
81000 Podgorica
Montenegro
PSD last updated
27 Aug 2020
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
Business opportunities
For business opportunities or procurement, contact the client company.
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Tel: +44 20 7338 7168
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General enquiries
Specific enquiries can be made using the EBRD Enquiries form.
Environmental and Social Policy (ESP)
The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.
More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.
Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
Specific requests for information can be made using the EBRD Enquiries form.
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).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
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 ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.
