The EIB will invest €50 million to support the green recovery and decarbonisation of the Montenegrin economy.
The EIB’s climate and environmental sustainability financing for Montenegro aims to accelerate the green transition and climate adaptation of small and medium businesses.
Since the start of the COVID-19 pandemic, the EIB has invested €100 million to support Montenegrin companies.
The European Investment Bank (EIB), the bank of the European Union, will lend €50 million to the Investment and Development Fund of Montenegro (IDF) to support the faster recovery of the local economy from COVID-19 and help introduce energy-efficient practices among small businesses in the country. The EIB loan signed today during a ceremony creates a new source of more affordable financing for Montenegrin companies operating in infrastructure, industry, transport, innovation, agriculture and tourism, some of the hardest-hit sectors.
Funds will be available under favourable conditions to help small and medium-sized enterprises (SMEs) address their liquidity issues, support jobs, increase competitiveness and improve energy efficiency practices. The EIB loan is the latest of Team Europe’s support measures to accelerate the COVID-19 recovery of regional economies and effective climate action. It delivers much-needed climate and environmental sustainability financing for the Western Balkans to enable a faster transition to a sustainable, green and circular economy.
EIB Vice-President Lilyana Pavlova, who is responsible for operations in Montenegro, said: “This operation addresses the two most important global economic and social issues of our time – COVID-19 recovery and climate action. As the EU climate bank, the EIB intends to ensure that Montenegro and the Western Balkans continue to benefit from access to affordable financing and technical assistance for climate and green investments. Climate action brings unparalleled opportunities for social and economic development to the region and the EIB will work alongside partners like the IDF to ensure green investments fuel economic and social development, regional integration, cohesion, and the EU accession process. We are actively looking across the region for partners to improve energy efficiency, reduce carbon footprint and transform regional economies into more competitive and sustainable economies both in the region and in Europe.”
Irena Radović, Executive Director of the Investment and Development Fund of Montenegro, said: “The economic crisis brought on by the COVID-19 pandemic continues to be a source of uncertainty, but also presents an opportunity for Montenegro to ensure a resilient, inclusive and green post-pandemic recovery. The significance of our long-standing partnership with the EIB and today’s event cannot be overestimated. As Montenegro’s national financial development institution, we are proud and passionate about taking the lead in the green transition and economic transformation in close cooperation with the EIB and being the first signatory of such an operation for climate action in the Western Balkans. This operation will give an additional impetus to increasing prospects for a faster green and inclusive recovery and help local small, medium and mid-cap enterprises improve their social impact in gender equality and youth employment, and encourage companies to employ people from vulnerable social groups. As such, greening Montenegro’s economy is becoming a decisive factor in our competitiveness and the ability to attract international finance and investments.”
Milojko Spajić, Minister of Finance and Social Welfare in the Government of Montenegro, said: “We are doing all we can in these challenging times to improve the living standards of our people, including by strengthening micro, small and medium enterprises. They make up 98% of all existing companies and contribute greatly to steady economic development, creating the right conditions for Montenegro to become a new EU Member State. Their development affects GDP growth and the creation of new jobs. At the same time, the greening of our economy is what could really increase Montenegro’s competiveness, as a small country with great opportunities. This kind of financing will help micro, small and medium enterprises not only make their businesses more sustainable after the COVID-19 crisis, but also expand them further. I would like to express my gratitude to our partner – the EIB – which, by acknowledging the importance of the transition to a green economy, is helping us to provide better and healthier living conditions for young Montenegrins.”
Oana Cristina Popa, EU Ambassador to Montenegro, said: “Small and medium-sized enterprises are the backbone of the Montenegrin economy, generating the majority of employment and value added. The European Union has consistently supported the SME sector, especially through the Instrument for Pre-Accession Assistance (IPA), helping them to tackle challenges and increase the overall competitiveness of the economy. We will persist in our efforts to support small and medium businesses during the IPA III period (2021-2027). Combined with the EU assistance for SMEs provided under the instrument, the EIB loan agreement will enable the recovery of the Montenegrin economy as well as contribute to its green transition.”
This is the second loan signed with the IDF since the start of the pandemic, following a €50 million investment signed in September 2020 to support the COVID-19 recovery of over 150 Montenegrin small and medium enterprises. Including the loan signed today, the EIB and the IDF have signed six operations to date, unlocking €470 million of investments for the Montenegrin economy.
The latest operation will also help to create new youth employment opportunities through special loan conditions provided under the European Youth Employment and Training for the Western Balkans (EYET) initiative. Agence Française de Développement is also co-financing the IDF and providing technical assistance to help the fund develop a strategy, guidelines and resources for climate action investments.
The Investment and Development Fund of Montenegro JSC (IDF) was established by the Law on the Investment and Development Fund adopted by the Parliament of Montenegro on 28 December 2009 and published in the Official Gazette on 23 April 2010. The IDF was incorporated as a limited company that is wholly owned by the State. Being a development institution, the IDF’s main role is to provide financial support to enhance the economic and social development of Montenegro. For this purpose, it provides direct lending to strategic sectors of the economy (tourism, services, manufacturing, etc.), also channelling its funds to sectors less targeted by commercial banks. The IDF mainly finances SMEs, entrepreneurs, individuals (agricultural producers), municipalities and public enterprises. It can also channel funds via commercial banks to reach SMEs.
The EIB is one the leading international financiers in the Western Balkans. Since 2009, the Bank has financed projects totalling almost €10 billion in the region. Besides providing continued support for the reconstruction and upgrade of public infrastructure, since 2010 the EIB has expanded into many new areas, such as healthcare, research and development, education and SMEs.
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 EIB and Podgorička banka (Member of the OTP Group) have agreed on a €20 million credit line for Montenegrinsmall and medium-sized enterprises (SMEs) and mid-caps operating in some of the worst affected sectors of the economy, such as services and wholesale/retail trade. The credit line will enable Montenegrin SMEs to address liquidity constraints for short-term working capital needs, as well as longer-term investments, thereby contributing to faster economic and social recovery from the downturn caused by the COVID-19 pandemic.
The EIB and Erste Bank Montenegro (EBM) have signed a €30 million loan to support small and medium enterprises and larger companies in Montenegro through working capital lines and investment loans. This is a first tranche of a loan worth €50 million the Erste applied for at the EU Bank. The funds will be available in form of more favourable commercial loans from Erste Bank Montenegro, to businesses operating across sectors such as tourism, manufacturing and services, among the hardest hit by the Covid-19 pandemic. The EIB credit line will also be open to Montenegrin public entities, including municipalities, for investments in energy and health infrastructure projects.