Montenegro’s government adopted information on Thursday on a 13 million euro borrowing arrangement with Erste Bank to finance a tugboat for the Bay of Kotor and a firefighting aircraft. The purchases are intended to strengthen state agencies’ ability to respond to emergencies, according to the government information.
The Ministry of Finance has agreed final terms with Erste Bank for two separate loan contracts. One would provide 8 million euros for the tugboat; the other would provide 5 million euros for an aircraft for the Ministry of Interior. Erste Bank is the lender under both contracts.
The terms set a fixed annual interest rate of 4% on funds drawn and a one-off processing fee of 0.1% of the total loan amount, payable at the first withdrawal. Funds would be available for 12 months. The contracts provide for principal to be repaid over 48 months from the date each loan enters repayment.
Principal payments would be made in half-yearly instalments, starting when the availability period ends or when the funds have been fully drawn, whichever comes first. Montenegro’s Budget Law and its borrowing decision for 2026 provide the legal basis for concluding the two contracts.
Aircraft costs and borrowing authority
The borrowing decision for 2026 provides for up to 100 million euros in debt to finance four multi-purpose helicopters for the Army of Montenegro and one firefighting aircraft for the Ministry of Interior. It provided for the lender for those purchases to be selected during the year.
The Ministry of Interior sought the start of borrowing for the aircraft in letters dated 30 August and 11 September. An interdepartmental working group reviewed the ministry’s needs, available procurement options and technical requirements. The estimated value of the aircraft purchase is up to 5 million euros.
The latest market research puts the estimated price of a two-seat aircraft capable of carrying up to 3,000 litres of water at 4.05 million euros. Another 850,500 euros is needed to pay customs VAT on import, while 99,500 euros is needed for the customs procedure, registration, insurance and pilot training.
The government information says the aircraft would improve the operational capacity of the protection and rescue system in light of increasingly pronounced risks from fires in open areas. The aircraft purchase and the tugboat purchase are both intended to improve state bodies’ emergency response capacity.
Tugboat procurement
Current budget funds did not cover the tugboat purchase. Financing was a prerequisite for starting public procurement, so the government provided for the purchase to be funded through borrowing. The plan is to draw the tugboat loan once, for up to 8 million euros; if the contracted purchase price is lower, only that amount would be drawn.
The multi-purpose tugboat is intended to assist ships entering and leaving the Bay of Kotor, manoeuvring and transiting through the bay. The government information describes the purchase as “of particular importance to improving navigation safety in the Bay of Kotor”.
Once in service, the vessel is expected to improve responses to fires on ships, oil spills at sea and evacuations. The stated aims include protecting lives, the marine environment and port infrastructure.
On 30 July 2026, the government adopted information on the need for a tugboat and tasked the Maritime Safety Administration with conducting an urgent public procurement on behalf of the Port Authority. The two bodies have concluded an agreement setting out their rights and obligations in the joint procurement.
The tugboat procurement process is expected to be completed by the end of 2026.
