The European Investment Bank (EIB) is lending EUR 5 million to Serbia and Montenegro for investment in collecting and treating municipal wastewaters and in the water supply system in the Republic of Montenegro. The investment schemes will initially address the needs of the Coastal region and of a few interior towns.
The project will help to bring Montenegro closer to the EU environmental standards, following the lines established by master plans funded by the EU and completed under the supervision of the European Agency for Reconstruction. The project also supports Montenegro's effort to comply with the objectives of the Barcelona Convention and the Genoa Declaration on Pollution Reduction in the Mediterranean Sea. Some project components (like schemes in Podgorica, Niksic and Tivat) form part of the European Commission's Priority Environmental Investment Programme for the Balkan region.
The purpose is to improve environmental services, reduced public health risks and enhance the region's attractiveness for tourism. In the first phase emphasis will be on upgrading the wastewater schemes. The focus will be on the implementation of collection systems and on the rehabilitation of pumping stations. In the future municipal wastewaters will discharge treated water into surface waters, including the Adriatic coastal area. In total some 450 000 resident people are expected to benefit.
The EUR 5 million loan represents a first tranche of the total EIB approved credit of EUR 57 million for this important project. The loan term will be up to 25 years with a grace period of up to 6 years. This first contribution of the EIB is expected to facilitate funding from other sources and donors for the follow-up.
The current project, to be implemented by 2009, is estimated to generate some 1500 jobs. This is the 7th operation signed between the EIB and the Republic of Montenegro since 2001. The total amount of EIB loans extended up to date stand at EUR 110 million. The last agreement signed between the Bank and Montenegro was in December 2005 for the loan of EUR 9 million in support of the rehabilitation of national roads. The EIB is currently appraising a second project to further support investment in railway transportation in Montenegro.