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EBRD contemplates €30 million loan for modernizing Montenegro’s rail passenger services

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The European Bank for Reconstruction and Development (EBRD) is currently considering granting a loan of up to €30 million to Montenegro’s rail passenger operator, Željeznički prevoz Crne Gore (ŽPCG).

This loan, backed entirely by the government, aims to facilitate the acquisition of electric multiple units (EMU) consisting of four cars. These modern units would replace the outdated and energy-inefficient train sets currently in use, marking a significant step forward in enhancing the country’s railway services. Notably, the Government of Montenegro has identified the renewal of rolling stock as a top priority for the nation’s railway development.

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The transition to the new fleet is projected to yield substantial environmental benefits, including an estimated reduction of 18,145 tons of CO2 emissions over the evaluation period from 2026 to 2037, representing a significant 53% decrease.

In addition to the financial support, the EBRD’s proposed loan comes with technical assistance to aid in project implementation, a review of the Public Service Contract, and efforts to enhance corporate governance standards within the company.

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Furthermore, the repayment terms for this loan extend beyond the market average, ensuring that the company adheres to the bank’s stringent environmental, social, and procurement policies.

ŽPCG a.d. Podgorica, the Montenegrin Rail Passenger Company, operates as a majority state-owned entity and serves as the sole passenger rail operator in Montenegro. With the government holding 90.79% of the company’s shares, ŽPCG plays a crucial role in the country’s transportation sector.

In its financial performance for 2022, the company reported revenues of €10.3 million and an EBITDA of €3.4 million, according to figures provided by the EBRD.

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