Montenegro’s Bar–Golubovci railway modernisation is under way, financed by a 63 million euros loan from the European Investment Bank (EIB) and a 112.6 million euros European Union (EU) grant through the Western Balkans Investment Framework. Robert de Grut, vice-president of the EIB, the EU’s bank, sees stronger links with neighbouring countries and the EU as a way to reduce Montenegro’s economic vulnerabilities, improve energy security and create business opportunities.
The railway section forms part of the TEN-T network and links the Port of Bar with northern Montenegro. De Grut expects the completed upgrade to support trade and tourism and provide a reliable alternative supply route if other routes are disrupted. It would also connect the port, which he described as a strategic economic resource, with the rest of Europe.
Completing key transport corridors and modernising rail and digital infrastructure could cut business costs, ease trade and attract private capital, in his assessment. Better connections could strengthen supply chains and help the region respond to shared challenges, including energy disruptions and security risks. “Investment in shared regional projects drives growth and resilience, and the two are closely linked,” he said.
Energy connections and company finance
Regional energy cooperation matters particularly because Western Balkan electricity systems are relatively small. Stronger cross-border interconnections could enable electricity trading, make more efficient use of storage capacity and improve energy security. In De Grut’s assessment, shared standards, greater competition and a more predictable market could also make the region more attractive to investors.
For Montenegro, that cooperation has particular relevance because of its substantial renewable energy potential and strategic position in the regional electricity network. He considers every euro invested in renewable energy and energy efficiency a means of reducing exposure to price shocks and dependence on imports.
A 50 million euros credit line has been provided through the Development Bank for small and medium-sized enterprises investing in renewable energy and energy efficiency. The financing is intended to help those companies become more competitive and resilient.
Across the Western Balkans, the EIB already supports electricity-grid modernisation, renewable energy projects and regional interconnections. Those investments are intended to accelerate the green transition and deepen market integration.
A larger regional market
De Grut regards a common regional market as one of the Western Balkans’ most important economic pillars. It could turn relatively small individual markets into a more attractive and competitive economic area. A region of 16 million residents connected by efficient transport, energy and digital networks would, in his view, appeal more to investors than small, fragmented markets.
Lower barriers to the movement of goods, services, capital and people could make the region more efficient for business and investment. His proposed improvements also include simpler border procedures, lower payment costs and greater labour mobility. A larger, rules-based market could send investors a positive signal and serve as a practical stepping stone towards the EU Single Market.
Green Corridors, SEPA and digital innovation hubs are among the initiatives he identified as helping companies conduct cross-border business and join European value chains. “Transport, energy and digital networks should function as one regional economic space, well connected to the EU,” he said.
Companies and citizens should be at the centre of that integration, with progress measured by whether businesses can find suppliers, attract talent, secure finance and sell products throughout the region and the EU. Other priorities he identified were mutual recognition of qualifications, digital public services, simpler trade and better access to finance for innovative businesses. He sees those changes as potential sources of investment and economic opportunities.
Investors also need clear, predictable and more closely aligned rules, legal certainty and transparent public procurement, in De Grut’s assessment. He identified efficient permitting, consistent application of EU standards, fair competition and reliable contract enforcement as further requirements. Well-prepared sustainable projects are essential to attracting capital, and the EIB is ready to expand advisory support to bring more projects to a stage suitable for financing.
“Investment in a better-connected region gives companies the scale, stability and access to invest, innovate and compete,” he said. The next phase of regional integration is expected to focus on implementing measures, deepening digital integration and improving cooperation on innovation, sustainable finance and green industry, alongside reform agendas.
Since 2009, the EIB has provided almost 11 billion euros for projects across the Western Balkans. Its financing supports roads, schools, hospitals, energy and water infrastructure, private-sector growth and the region’s closer alignment with the EU. As the EU’s bank, it seeks to turn the accession process into concrete economic opportunities.
The EIB expects to invest around 600 million euros in the Western Balkans this year. The expected funding will support connectivity, climate action, human capital and small businesses, priorities De Grut links to EU accession and regional integration.
