The EIB will invest €50 million to support tourism and other sectors severely affected by COVID-19 and help companies sustain liquidity and jobs.
The EIB and IDF are cooperating to increase the resilience of the Montenegrin economy and promote youth employment.
This is the first EIB loan for the faster recovery of the Montenegrin economy under the Bank’s COVID-19 exceptional financial measures.
Montenegrin small and medium-sized enterprises (SMEs) and mid-caps in tourism and other sectors severely affected by COVID-19 will benefit from a €50 million loan that the European Investment Bank (EIB) has signed today with the Montenegrin Investment and Development Fund (IDF). The loan will provide immediate support for the faster recovery of the Montenegrin economy by unlocking more affordable financing for SMEs, mid-caps and public sector enterprises to sustain jobs and maintain their liquidity.
The loan is a part of the Team Europe Western Balkans COVID-19 recovery support programme, announced at the EU-Western Balkans Zagreb Summit in April. It provides affordable finance to businesses to ensure their continuity and faster and sustainable recovery from the pandemic. This facility is also the first allocation under the €500 million programme loan approved by the EIB Board of Directors in June 2020 targeting the public sector and national promotional banks in the Western Balkan region.
EIB Vice-President Dario Scannapieco said: “SMEs and mid-caps in Montenegro have been severely hit by the COVID-19 pandemic. With tourism being the main driver of economic growth, the EIB will help Montenegro face these unprecedented challenges, support its main source of income, recover faster and build a more resilient economy. Our more affordable loans will support other key sectors such as trade, transport and construction. We are proud to deliver this key component of Team Europe’s support package for Montenegro as a candidate country to join the European Union.”
Zoran Vukcevic, President of the Investment and Development Fund of Montenegro, said: “The European Investment Bank has once again shown that it is a true friend of Montenegro and a strategic partner of the Investment and Development Fund, with additional support in challenging and crisis moments, which are now experienced by the Montenegrin, as well as the world, economy. The cooperation of the Investment and Development Fund with the European Investment Bank, not only at this crisis moment, is of great importance for the IDF, and above all for the Montenegrin economy. The loan funds in response to the COVID crisis will be used to preserve the liquidity of the economy and jobs, but also for development projects, which will contribute to the creation of new economic value in Montenegro and support the transformation of our economy towards a circular and sustainable system in the post-pandemic period that follows. So far, these funds have supported over 750 projects that have created and/or preserved over 25 000 jobs in Montenegro. I believe that these projects have given a special impetus to the development of the Montenegrin economy and strengthened its path of European integration.”
Oana-Cristina Popa, EU Ambassador and Head of EU Delegation to Montenegro, said: “SMEs are the backbone of Montenegro's economy, generating more than three quarters of employment and almost 70% of value added. Even before the COVID-19 crisis struck, SMEs faced numerous challenges such as difficult access to finance, red tape, inadequate infrastructure and an insufficiently skilled workforce. The EU has traditionally been supporting the SME sector, helping it to tackle those challenges and increase competitiveness of the Montenegrin economy. At this time of unprecedented health and economic crisis, the EIB assistance is even more valuable as SMEs struggle to maintain liquidity and sustain jobs. Combined with the EU Delegation’s planned assistance to support micro and small enterprises in the aftermath of COVID-19, this loan agreement will provide a substantial foundation for a faster recovery of the Montenegrin economy.”
The EIB loan will be available at the IDF to individual entrepreneurs, companies and public enterprises operating in various sectors. This operation specifically aims to address the working capital, liquidity needs and investment constraints of SMEs and Mid-Caps in Montenegro in the context of the COVID-19 outbreak. The credit line will allow flexibilities to accelerate fund disbursement and address the most urgent liquidity and employment issues. It will encourage creating job opportunities and training for youth, under the initiative European Youth Employment and Training for the Western Balkans(EYET), promoting youth employment in Montenegro.
To date, the EIB and the IDF have signed five operations and disbursed €320 million to the Montenegrin economy, sustaining over 25 000 jobs.
About the EIB in Montenegro:
The EU bank has been active in Montenegro since 1977 and has provided €890 million worth of loans to the country, mostly in support of SMEs, education and transport infrastructure. In 2019 alone, the EIB signed loans of €141 million, focusing on SME support and the construction of additional education facilities across the country. For more information regarding the EIB’s projects in Montenegro, please refer to: https://www.eib.org/en/projects/regions/enlargement/the-western-balkans/montenegro/index.htm
About the EIB in the Balkans:
The EIB is one the leading international financiers in the Western Balkans. Since 2007, the Bank has financed projects totalling almost €8 billion in the region. Besides continuing its support for the reconstruction and upgrading of public infrastructure, since 2010 the EIB has expanded into many new areas, such as healthcare, research and development, education and SMEs.
About Team Europe and the COVID-19 response in the Western Balkans:
As part of the #TeamEurope strategy, the EU's global response to COVID-19, the EIB Group has rapidly mobilised €5.2 billion outside the EU, accelerating financing and targeted technical assistance. For the Western Balkan countries specifically, the EIB has prepared an immediate support package of €1.7 billion primarily for SMEs and the healthcare sector. The EU has also mobilised €53 million in grants for the health sector in Montenegro, including €3 million to procure lifesaving medical equipment including medical ventilators, digital mobile x-rays, testing kits and personal protective gear. The remaining €50 million will be used to address the socioeconomic impact of the outbreak, including support for the most affected businesses, such as companies working in the tourism and transport sectors. The total EU financial support package for the Western Balkans amounts to more than €3.3 billion.
The Investment and Development Fund of Montenegro JSC (IDF) was established by the Law on Investment and Development Fund adopted by the Parliament of Montenegro on 28 December 2009, and founded on 23 April 2010 with the publication of that law in the Official Gazette. IDF was incorporated as a limited company with 100% of its shares in State ownership. Being a development institution, IDF’s main role is to provide financial support for enhancing the economic and social development of Montenegro. For this purpose, the bank provides direct lending to strategic sectors of the economy (tourism, services, manufacturing, etc.), also channelling its funds to sectors less targeted by the commercial banks. IDF mainly finances SMEs, entrepreneurs, individuals (agricultural producers), municipalities, public enterprises, etc. IDF can also channel funds via commercial banks to reach SMEs. https://www.irfcg.me/me/
Raiffeisenverband Salzburg (RVS) and the EIB are intensifying their cooperation. Due to high demand for loans, RVS has signed a further €30 million financing agreement with the EU bank. This is the first tranche of an overall sum of €50 million for which RVS has secured the EIB’s agreement. To provide clear impetus for investment in the region, the new loan volume will also be doubled by Raiffeisen Salzburg to €100 million in the coming years.
The EIB Group (EIB and EIF) signed 27 operations in Portugal in 2020 for a total financing volume of €2.336 billion, an increase of 44% compared to 2019, and accounting for around 1.2% of the country’s GDP. Overall, Portugal was, of all EU countries, the 4th largest beneficiary of EIB Group support as a percentage of GDP.