The Government of Montenegro has approved a negotiating framework for an IBRD loan of up to 35 million euros for the WaSCA water project, according to information published on 30 October. The proposed financing would support improvements to water services and climate resilience, including short-term water security in the country’s coastal region.
The project is estimated to cost around 55 million euros, with financing planned from an IBRD loan of up to 35 million euros and up to 20 million euros from the OPEC Fund for International Development. The fund’s loan was previously agreed to co-finance the project’s first component alongside IBRD funding.
The IBRD loan would have a 15-year repayment period and a two-year grace period. Its interest rate would be variable, meaning the final financing cost would also depend on movements in six-month EURIBOR over the life of the arrangement.
WaSCA, or the Water Security and Climate Adaptation project, is the first phase of a multi-phase programme to improve water security and develop water services that can withstand climate change. Its development objective is to improve the quality and reliability of water services in selected municipalities and strengthen short-term water security in Montenegro’s coastal region.
The project is also intended to upgrade water infrastructure and strengthen the country’s resilience to climate change and its increasingly pronounced effects. It is expected to support more reliable and sustainable management of water resources, as well as improve infrastructure and institutional capacity in the sector.
Official loan negotiations began on 22 October. The negotiating team, authorised by the Government to discuss financing terms and the loan agreement with IBRD, included representatives of the Ministry of Finance, the Ministry of Ecology, Sustainable Development and Northern Region Development, and the Ministry of Agriculture, Forestry and Water Management. Regional Waterworks, PROCON, the Project Implementation Unit and the Technical Services Unit also took part.
Key contractual and project documents needed to conclude the agreement and carry out the project were agreed during negotiations. Activating the loan arrangement requires the establishment of the Project Implementation Unit and approval of an operational manual; implementation is planned to continue until the end of 2031.
