London, United Kingdom – The EBRD has adopted its first strategy for Montenegro, which joined the Bank as an independent country last year.

The EBRD, south-eastern Europe’s largest institutional financial investor, has been active in Montenegro since 2001, when the country was still in a union with Serbia. Following its independence on 3 June 2006, all EBRD shareholders accepted Montenegro as a shareholder and an independent country of operations. The Bank opened an office in Podgorica in June 2007.

So far, the EBRD’S activities in Montenegro have focused mainly on infrastructure projects, including a rehabilitation of Montenegro’s airports and roads, as well as loans and equity investments in banks and micro-enterprises.

The new strategy notes that during its first year as an independent country, Montenegro has proved to be a politically stable and economically viable state which has the potential to grow rapidly. At the same time, many challenges common to countries in transition are present in Montenegro, including limited capacity of the public administration and the need to implement institutional reform, especially in the areas of competition, infrastructure and non-bank financial institutions.

In the coming period, the Bank will support technical assistance and investment in the efforts of the government to continue its implementation of the reform agenda and to improve the country’s business climate. Responding to the country’s needs and priorities, the EBRD is shifting more to the private sector and will focus its activities on the following sectors:

• In the private corporate sector, the Bank will support the country’s chosen strategy of low-density, higher-end tourism property development, ensuring balanced and environmentally sustainable development. The Bank also aims to increase its operations with local private corporate clients and promote their investments in new technology and environmental improvements;
• In the infrastructure sector, together with other international financial institutions, the Bank will support sustainable modernisation of key infrastructure areas, such as energy, roads and railways, as well as commercial financing for municipalities. Priority will be given to projects with a strong impact on tourism and with regional dimension, involving private sponsors wherever possible
• The EBRD will continue to provide support for further consolidation of the financial sector through cooperation with commercial banks and micro-lending institutions, including financing small and medium-sized enterprises.

The Bank will support technical assistance and official co-financing which are crucial for project preparation and institution building, particularly promoting smaller scale local enterprises and for public sector operations.

Prior to its becoming an independent country of operations, the EBRD had invested €43.3 million in Montenegro.