In the first nine months of this year, Montenegro’s capital budget saw expenditures of €110.91 million, which accounts for 47% of the total planned amount as revised by the budget adjustment. This information comes from the report on the implementation of the capital budget for the third quarter, which was adopted by the government last week. Out of the total expenditures, €15.71 million came from loans and €8.09 million from EU donations (IPA projects).
The report notes that this expenditure is slightly above the previous year’s figures, where €96.80 million was spent during the same period, representing 48% of the planned budget. The execution rate for the first three quarters of the current year is nearly identical, with an increase of €14.10 million in absolute terms.
Project funding breakdown
For projects managed by the Directorate for Capital Projects, a total of €66.46 million has been disbursed (55% of the planned amount), which is €9.76 million more than last year. Of this amount, €55.57 million was drawn from general budget revenues, €2.80 million from loans, and €8.09 million from EU donations.
For projects overseen by the Directorate for Transport, total payments amounted to €44.45 million (49% of the planned total), also reflecting a €9.76 million increase compared to last year. Of this, €31.53 million was sourced from general budget revenues, while €12.92 million came from loans. Notably, excluding the planned (€40.24 million) and actually paid (€1.29 million) amounts for the highway, the execution of the capital budget for the Directorate for Transport from general budget revenues stands at €30.24 million, representing only 40% of the planned amount for other projects aside from the highway.
Increased utilization of loan funds
There has been a noticeable increase in the use of loan funds, with €15.71 million spent this year, which is €6.57 million more than in the previous year. This expenditure relates to four projects that are progressing as scheduled, including the construction of the “Vladimir Nazor” elementary school in Podgorica and the adaptation of ten vocational schools funded by the EIB, managed by the Directorate for Capital Projects, as well as the reconstruction of the Lepenac – Ribarevine – Poda – Berane main road and the construction of the Tivat – Jaz boulevard, managed by the Directorate for Transport.
Additionally, there has been a significant increase in the realization of IPA projects, with €8.09 million spent in the first nine months of this year, representing a €2.28 million increase compared to last year. This expenditure mainly pertains to the following projects: the construction of the Infectious Diseases Clinic and the Dermatovenerology Clinic at KCCG (completed), the reconstruction, adaptation and equipping of microbiological laboratories (completed), the construction of an operational center (completed), technical support for capacity building and alignment of national legislation with EU regulations in the transport sector (completed), the UIKS complex in Danilovgrad (ongoing) and supervision of works to improve infrastructure in the justice sector (continuously ongoing).
Increased funding for the Directorate for Capital Projects
The amendments to the Budget Law for this year allocated a total of €237.01 million for the capital budget, which is €3 million less than initially planned. Given that a loan arrangement has been secured for the construction of the highway segment from Mateševo to Andrijevica—entailing significant donations—and that tender procedures are already underway under the strict rules of the European Bank for Reconstruction and Development (EBRD), the initially planned advance payment to the selected contractor (10% of the contract value, originally budgeted at €50 million) will not be needed by the end of this year. Thus, the approved budget adjustment has allowed for the reallocation of funds necessary for the realization of other capital projects, which are advancing faster than initially planned. This has resulted in a significant increase in the total allocated funds for the Directorate for Capital Projects at the expense of the capital budget for the Directorate for Transport.
