The European Union (EU) provided a EUR 5 million grant to support water and sanitation projects in five municipalities in Montenegro. This grant from the Municipal Window of the Infrastructure Project Facility (IPF) will be blended with a loan from the European Investment Bank (EIB) in the context of the Western Balkan Investment Framework (WBIF). The WBIF is an initiative by the European Commission, the EIB and International Financial Institutions to accelerate projects in the Western Balkans.

To implement this grant, the European Investment Bank (EIB) and the Government of Montenegro signed a EUR 5 million grant agreement on 11 March 2011 in Luxembourg and 18 March 2011 in Podgorica.

The EUR 5 million grant from the EU will be dedicated to the construction and upgrading of water and wastewater infrastructure in the five municipalities across Montenegro. This investment is part of the Montenegro Water and Sanitation Project, which already benefits from an EIB loan aiming at improving water and sanitation in some 10 municipalities of the Montenegro.

The project is fully in line with the EIB's lending priorities for the improvement of environment and the strengthening of infrastructure and activities in support of the countries candidate and potential candidate to the European Union.