Montenegro: The European Union through EIB Global to invest up to €76 million in reconstruction of Bar–Podgorica–Vrbnica railway line under Team Europe initiative

• The financial package signed today entails a €40 million loan and €35.5 million worth of EU grants and technical support for project preparation and implementation.
• The project will enable the reconstruction of a 167 km long railway line to improve rail efficiency, safety and capacity, while facilitating the shift to a greener transport system in the country.
• As the largest financier of railway modernisation in the Western Balkans, EIB Global has invested €1.9 billion in the sector to date.

In the presence of high-level government and EU officials, the European Investment Bank (EIB) Global has signed a €75.5 million financial agreement for the reconstruction of a 167 km long railway section between Bar, Podgorica and Vrbnica. These infrastructural improvements along the extended Trans-European Transport Network (TEN-T) will improve rail capacity, efficiency and safety, benefiting over 1 million passengers a year and international freight traffic. The project will also promote a modal shift from road to rail, contributing to a more sustainable transport system in the country.

Facilitated under the Team Europe initiative, a €75.5 million EU financial package (covering 95% of the estimated project cost) is made up of a €40 million EIB loan and two grants totalling €35.5 million, which will be channelled through the Western Balkans Investment Framework (WBIF). The Government of Montenegro is contributing with €4.5 million from its own resources. Technical support for project preparation, supervision and implementation also forms part of the agreements signed today at the ceremony held in Podgorica. The event was attended by the EIB Global Director for Enlargement and Neighbourhood Lionel Rapaille, Minister of Finance of Montenegro Novica Vuković, Minister of Transport and Maritime Affairs of Montenegro Filip Radulović and EU Ambassador to Montenegro Oana Cristina Popa.

EIB Vice-President Kyriacos Kakouris said: “The upgrade and extension of rail transport infrastructure is a priority both for the European Union and the Government of Montenegro, as it is crucial for regional integration in the Western Balkans. This project builds on the EIB’s previous support for the rail section between Bar and Vrbnica — the main railway line in Montenegro — but also our recent investments in strategic railway corridors in Serbia, North Macedonia and Albania, aiming to provide better and faster links within the region and with the European Union. In this way, we are expanding multimodal transport options, contributing to a cleaner environment and better trade.”

Minister of Finance of Montenegro Novica Vuković said: “Our goal, in partnership with the European Investment Bank, is to foster the development of better, more efficient and safer infrastructure. This will ultimately enhance connectivity and accelerate Montenegro’s economic growth. The credit arrangement signed today is one of several agreements concluded with the EIB aimed at strengthening and improving railway infrastructure in Montenegro. According to this year's budget law, the EIB, alongside the European Bank for Reconstruction and Development, will finance the reconstruction of the railway on the Bar–Golubovci section. This collaborative effort involves a total investment of up to €113 million, supported by a substantial grant of €112.6 million from the European Union provided through the WBIF.”

The project will involve rehabilitating a 20 km single-track rail section between Lutovo and Bioče, rebuilding 13 steel bridges and eight tunnels (with a total length of around 2.6 km), and modernising rolling stock workshops and depots located in Podgorica, Bar and Nikšić.

Minister of Transport and Maritime Affairs of Montenegro Filip Radulović said: “The Ministry of Transport and Maritime Affairs is one of the largest beneficiary institutions of EU grants in the field of transport, primarily through the WBIF. Strong support from the European Union and the EIB in financing railway infrastructure improvements means that Montenegro is on track to creating a transport system that will be compatible with the European Union’s transport system and that can continue to be upgraded so that our country is able to comply with EU railway standards. Railway renovation is an urgent priority if we are to ensure a sufficient level of development in Montenegro and attract passengers and goods flows. The implementation of this project will make rail a more attractive mode of transport, which will ultimately have a positive effect on competitiveness. Investing in this green mode of transport will also help to preserve the environment.”

Ambassador of the European Union to Montenegro Oana Cristina Popa said that today’s event was the perfect occasion to recall that Montenegro’s EU integration is much more than a process of closing chapters or approximating laws. “Fundamentally, it is about advancing people’s rights and freedoms, and enabling them to lead healthy, safe and fulfilling lives. The EU, as Team Europe, continues to support economic prosperity and the further development of Montenegro’s economy and its connectivity with EU Member States. In addition, our support will help Montenegro to transition towards greener and more sustainable transport modes.”

During the visit to Podgorica, the EIB Global delegation met with the President of Montenegro Jakov Milatović and Prime Minister Milojko Spajić. At bilateral meetings, the parties discussed further opportunities to expand the scope of activities eligible for technical advisory support and new sectors to be covered in support of the country’s EU accession, climate and connectivity ambitions. In its long-standing cooperation with Montenegro, the EIB has provided financing for 29 projects with over €1.1 billion signed to date.

As the largest financier of the railway sector in the Western Balkans with €1.9 billion invested, the Bank plans to continue supporting the country’s railway upgrades. New investments are already in the development phase, such as the reconstruction of the Bar–Golubovci section on Rail Route 4.