The European Bank for Reconstruction and Development (EBRD) is evaluating a potential sovereign-guaranteed loan of up to €30 million to Montenegro’s state passenger railway operator, ŽPCG. This financing aims to support the acquisition of 10 new sleeping cars intended for international rail services.
This project is currently in the exploratory phase, pending final assessment, with a decision expected on December 2, 2026. As of now, the financing agreement has not been finalized.
The total cost of the initiative is pegged at €30 million, categorized as part of the 100% Green Economy Transition strategy. This classification highlights an anticipated shift in passenger preferences from road and air travel to rail options.
The introduction of these new coaches is expected to replace outdated rolling stock currently in use on international routes and enhance compatibility with European railway systems. This improvement is particularly significant for Montenegro’s connections with Serbia and further links to central Europe, where overnight rail travel remains one of the few viable long-distance options.
ŽPCG is primarily state-owned, holding a stake of 96.34%, which means that the sovereign guarantee represents both a public finance obligation and an investment in transportation infrastructure.
This proposal follows a previous contract worth approximately €30 million with Stadler for three FLIRT electric trains, signed earlier in 2026. Montenegro is also making substantial investments in the rehabilitation of the Bar-Podgorica railway corridor.
However, enhancing international passenger services will require more than just improved coaches. Factors such as journey duration, track conditions, border crossing processes, and timetable reliability are crucial determinants influencing travelers’ choices between rail, road, or air transport.
The proposed financing is intricately linked to broader infrastructure initiatives. The new sleeping cars are expected to enhance comfort and bolster overnight service between Montenegro and Serbia, especially during peak summer tourism periods. Nevertheless, their economic viability will largely depend on concurrent infrastructure improvements that yield faster and more dependable travel times.
As road congestion and airport traffic continue to rise, rail could serve as a viable alternative for passengers traveling between Serbia and the Montenegrin coast.
The sovereign guarantee alleviates some financial pressure from ŽPCG but also exposes the state to potential credit risks associated with the operator. Consequently, effective utilization and performance of services will be critical once the new coaches are operational.
The next key milestone in this process is the EBRD’s approval scheduled for December. If granted and finalized, this project would modernize Montenegro’s international passenger offerings, though its success will ultimately depend on whether railway enhancements can compete effectively against road and air travel options.
