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Tuesday, May 28, 2024
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Montenegro secures financing for railway revitalization project

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For the railway reconstruction project, specifically to fund the general overhaul of the track, repair 13 steel bridges and tunnels, and modernize depots and workshops, a total of 80 million EUR is required. Of this amount, 40 million will be secured through a loan from the European Investment Bank (EIB). During the latest government session, the Government approved the starting terms for the Loan Agreement and accepted the Draft Agreement proposal.

According to the Law on the Budget of Montenegro for 2024, the state has the authority to borrow for project financing through credit arrangements, including with the European Investment Bank (EIB), for the Railway Infrastructure of Montenegro and the Maintenance of railway rolling stock. This includes financing the project for the general overhaul of the track, repair of 13 steel bridges and tunnels, and modernization of depots and workshops, up to a maximum of 40 million EUR.

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“The implementation of these projects aims to eliminate speed restrictions, enhance infrastructure reliability, reduce maintenance costs, improve safety on a 20 km track section, and enhance capacity for modern locomotive and wagon maintenance,” explained officials.

Since investment grants cover 50% of the project value, preparations have commenced for contractual documentation and negotiations to finalize a loan agreement with the European Investment Bank (EIB) for the remaining 50% of the estimated investment value.

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The total investment is estimated at around 80 million EUR, with 35.5 million allocated as a grant from available EU funds within the Western Balkans Investment Framework (WBIF). Montenegro will secure 40 million EUR through a loan, while the remaining 4.5 million will need to be provided from internal resources, as per the information provided.

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