- The EIB grant widens access to financing for currently underserved small and medium companies (SMEs)
- EIB technical support will help accelerate the recovery and growth of SMEs in Montenegro
- In cooperation with the IDF, the EIB has invested €100 million since 2020 to accelerate the recovery of the Montenegrin economy from COVID-19, which has supported about 350 companies
The European Investment Bank (EIB), the bank of the European Union, will provide a €400 000 grant for technical assistance support to the Investment and Development Fund of Montenegro (IDF). The grant will strengthen the IDF’s capacity to provide financial services for the benefit of the SME sector in Montenegro, to help small and medium businesses maintain liquidity, expand their investments, sustain and create inclusive, long-term jobs. With this technical assistance, the EIB supports the IDF in the improvement of its organisational and business model to bring its structure in line with best international practices of national development banks.
The EIB grant aims to accelerate the recovery and growth of the private sector in Montenegro and create new job opportunities, especially for young people, women and people from other vulnerable social groups. The grant stems from the Economic Resilience Initiative (ERI), set up by the EIB in 2016 to mobilise financing for faster growth, job creation, social cohesion and development of vital infrastructure projects in the Western Balkans.
EIB Vice-President Lilyana Pavlova, who is responsible for operations in Montenegro, said: “We are delighted to be able to strengthen the IDF’s ability to serve the Montenegrin economy and fuel its sustainable growth. Together with our long-standing partner in the region, we have so far unlocked over €470 million for the Montenegrin economy and I am happy to see our cooperation expanding to ensure we can support underserved companies that face difficulties in accessing external financing, as well as people looking for long-term jobs. By increasing the IDF’s capacities, the EIB will enable faster private sector growth and Montenegro’s transformation to an inclusive, digital and sustainable economy.”
Irena Radović, Executive Director of the Investment and Development Fund of Montenegro, said: “We are looking forward to expanding cooperation with the EIB through this extremely important technical support programme. The exchange of experiences and application of best practices of state development banks from the European Union will significantly strengthen the IDF, redefine its business model and consider the conditions for transformation into a state development bank. Thanks to this grant, the IDF will improve its business and organisational model, all to finance sustainable growth and increase competitiveness while continuously creating opportunities for job creation. This will contribute to the accelerated sustainable development and recovery of Montenegro’s economy after the pandemic.”
Since the start of the pandemic in 2020, the EIB has signed financing operations worth €100 million with the IDF, which has helped around 350 companies in Montenegro recover faster from the COVID-19 crisis. In 2021, the EIB signed its first loan with the IDF to support the introduction of energy-efficient practices and projects among SMEs in Montenegro, enabling a faster transition to a sustainable and circular economy in the country.
Background information
About the IDF:
The Investment and Development Fund of Montenegro JSC (IDF) was established by the Law on Investment and Development Fund in 2009. The IDF was incorporated as a limited company with 100% of its shares in State ownership. 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, the IDF provides direct lending to strategic sectors of the economy (tourism, services, manufacturing, etc.). The IDF is a leader in funding green and digital transformation with a focus on empowering young people and women in business. The IDF mainly finances SMEs, entrepreneurs, individuals (agricultural producers), municipalities, public enterprises, etc.
Economic Resilience Initiative
The Economic Resilience Initiative (ERI) was created in 2016 in response to a call from the European Council. The objective of the initiative is to help shift patterns of migration in the medium to long term and provide support to forcibly displaced populations by increasing the resilience of economies to future shocks. The ERI is doing this by mobilising finance to support growth, job creation, vital infrastructure projects and social cohesion in the European Union’s neighbouring regions.
About the EIB in Montenegro:
The EU bank has been active in Montenegro since 1977 and has provided almost €1 billion worth of loans to the country, mostly in support of SMEs, education and transport infrastructure.
About the EIB in the Balkans:
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.
About EIB Global:
EIB Global is the EIB Group’s new specialised arm dedicated to increasing the impact of international partnerships and development finance. EIB Global is designed to foster strong, focused partnership within Team Europe, alongside fellow development finance institutions and civil society. EIB Global brings the Group closer to local people, companies and institutions through our offices across the world.