EBRD provides loan of up to 30 million euros: Railway transport buys three multi-unit electric trains

The European Bank for Reconstruction and Development (EBRD) will provide a loan of up to EUR 30 million to Railway Transport (ŽPCG) for the purchase of a new rolling stock.

The loan, which will be guaranteed by the Montenegrin Government, will be used for the purchase of three electric multi-unit trains (EMUs), which will run throughout the country's railway network.

The European Bank for Reconstruction and Development (EBRD) will provide a loan of up to EUR 30 million to Railway Transport (ŽPCG) for the purchase of a new rolling stock.

The loan, which will be guaranteed by the Montenegrin Government, will be used for the purchase of three electric multi-unit trains (EMUs), which will run throughout the country's railway network.

"The new rolling stock will replace the old, energy-inefficient locomotive trains that are currently in use, and thus improve the comfort, quality and reliability of transport services," the EBRD announced.

The government has identified the improvement of railway passenger services as a priority for the development of the railway sector in the country and the promotion of the modal shift from passenger cars to rail traffic.

The project includes technical assistance to support project implementation and procurement, with 325 thousand euros from the EBRD Shareholders' Special Fund.

In addition, the company will receive technical support and funding from the EU Reform Fund to improve its corporate governance practices, standards and public service contracts.

The signing was attended by Montenegrin Minister of Finance Novica Vuković, Executive Director of ŽPCG, Ilinka Pavićević, Head of EBRD Office in Montenegro Remon Zakaria and EBRD Director for Infrastructure for Europe, Middle East and Africa, Sue Barrett.

Vuković announced that they are pleased that the EBRD has invested over 800 million euros through various investments, including transport infrastructure, as a strategic partner for many years, both through the public and private sectors.

"The credit arrangement signed today between ŽPCG and the EBRD, with a state guarantee, will enable the purchase of up to three sets of four-part electric motor sets, which ŽPCG will use on the entire railway network of Montenegro. The new rolling stock will replace the old, energy-inefficient trainsets with locomotive traction that are currently in traffic," said Vuković.

Also, as he added, the project will support the development of the rail transport sector through the modernization of the rolling stock, which will significantly reduce carbon emissions by switching from road to rail transport.

"It is clear that the introduction of environmentally friendly solutions is no longer a trend, but a real need and a direction to choose. I use the opportunity to thank you for the exceptional cooperation and continuous support in financing projects that will enable Montenegro to achieve its key foreign policy goal, which is full membership in the European Union (EU)," said Vuković.

Pavićević announced the start of the implementation of one of the largest investment projects related to the modernization of the rolling stock of Montenegrin railways.

"It is a loan arrangement that is realized with the support of the EBRD bank in the amount of 30 million euros, and which will be intended for the purchase of new electric trains for the needs of internal railway passenger traffic. "After almost 13 years, we have the opportunity to announce the purchase of new trains that will significantly improve the quality of the railway service in Montenegro," said Pavićević.

She explained that after the signing of the loan agreement and the guarantee agreement, the selection of consultants for this project will follow, which will be carried out in accordance with the policy and rules of public procurement of the EBRD.

"After the selection of consultants, the announcement and implementation of an international two-phase tender for the procurement of new trains will follow, about which interested parties and the public will be informed in a timely manner," said Pavićević.

Barrett assessed that the signing of the loan agreement demonstrates the EBRD's continued support for the Montenegrin railway sector through support for the railway operator to provide better services to its passengers.

“This project will also help to promote the use of green and safe transport in line with the Bank's goals for green economies. "The EBRD is committed to further support for the sustainable development of Montenegrin transport infrastructure, in cooperation with its partner institutions, with the aim of promoting the economic and regional integration of Montenegro," said Barrett.

Zakaria believes that the acquisition of multi-unit electric trains will significantly improve safety, quality and comfort.

"Passengers can expect more reliable and punctual rail services, which will lead to increased satisfaction and trust in the national rail system. "The replacement of old, energy-inefficient trains with locomotives by new electric trains with multiple units will significantly reduce energy consumption and, therefore, the emission of harmful gases," said Zakaria.

According to him, this transition to an environmentally friendly vehicle fleet is in line with Montenegro's commitment to sustainable development and reduction of harmful gas emissions.

"We are confident that this loan will play a key role in the transformation of rail services, providing tangible benefits to both the operator and passengers," concluded Zakaria.

Since Montenegro joined the EBRD, the bank has invested more than 800 million euros in 86 projects.

The priorities of the bank in Montenegro are the support of competitiveness, the green transition and its further integration into regional and global markets.