The Government of Montenegro has considered the starting terms for two separate Erste Bank loans worth up to 13 million euros, for a tugboat for the Bay of Kotor and a firefighting aircraft for the Ministry of Internal Affairs, according to a Ministry of Finance document. The Ministry of Finance will continue negotiations with Erste Bank and submit final terms to the government for consideration and acceptance.
Procurement plans and timing
The proposed loans would be capped at eight million euros for the tugboat and five million euros for the aircraft. Borrowing of up to eight million euros for the tugboat is already provided for under the Budget Law and the Decision on Borrowing of Montenegro for 2026, which called for a lender to be selected during the year.
In September, the Ministry of Maritime Affairs initiated the borrowing proposal. It said funds for the vessel were not provided in the current budget and financing is needed before public procurement can start. According to correspondence from the ministry, the procurement process should be completed by 31 December 2026, with the funds drawn in one payment up to the contracted procurement value.
The planned multifunctional tugboat is intended to improve navigation safety and assist ships in the Bay of Kotor, according to the Ministry of Maritime Affairs. It would also add capacity for emergencies, including fires on vessels, oil spills and evacuations.
For the firefighting aircraft, the Ministry of Internal Affairs estimated the purchase cost at up to five million euros. Market research cited in the document priced a two-seat aircraft with capacity for up to 3,000 litres of water at 4.05 million euros. The estimate also provides for 850,500 euros in customs VAT and 99,500 euros for customs procedures, registration, insurance and pilot training.
Payment for the aircraft is planned for the end of the second quarter of 2027. The Ministry of Internal Affairs said funds need to be secured in time for procurement to start immediately, so the aircraft can be delivered and put into operational use.
Bank offers and proposed terms
To obtain financing proposals, the Ministry of Finance contacted all 11 domestic commercial banks. Two did not submit offers, while CKB and Erste Bank were identified as having the most competitive proposals. CKB did not submit a new offer after being invited to revise its proposal; Erste Bank provided revised terms for both loans.
Erste Bank offered a 60-month repayment period for each loan and a funds-availability period of up to 12 months. Its interest options are a fixed rate of 4% or a variable rate equal to three-month EURIBOR plus 1.6%. The proposed processing fee is 0.1% for each loan, with principal repayments every six months. Promissory notes and authorisations for promissory notes are listed as security.
A Ministry of Finance document says: “The Ministry of Finance will continue negotiations with ERSTE bank on concluding the loan arrangement.” The Government of Montenegro, the Ministry of Finance, the Ministry of Maritime Affairs, the Ministry of Internal Affairs, Erste Bank and CKB are involved in preparing the arrangement.
