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World Bank Group | Montenegro

Press release from the Office of the World Bank in Montenegro

The World Bank [1] and the Government of Montenegro, for the first time as an independent country, signed two agreements underlying their collaboration in key areas of socio-economic development. These are aimed at financing investments and supporting reforms to foster sustainable tourism development and security in energy supply.

See online: World Bank Group.

Eight months after Montenegro’s membership to the World Bank, Finance Minister Igor Lukšić and the World Bank Representative in Montenegro, Mr. Jan-Peter Olters, signed the agreements of US$19 million (about €14 million), which will intensify the close relationship between the Government and the World Bank in these two critical sectors of Montenegro’s economy, as outlined in the World Bank’s recently approved Country Partnership Strategy.

Sustainable tourism development

In recognizing the critical importance of tourism as source for economic growth and development, the World Bank seeks to support the Montenegrin Government in improving the design and implementation of an integrated coastal zone management approach so as to reduce coastal degradation and foster environmentally sound development of high-quality tourism alongside Montenegro’s coastline.
The project will finance:
(i) improvements in land-use planning and the protection of the Bojana-Buna Delta to assist the Government in precluding uncontrolled construction and development;
(ii) investments for the Continental and Southern part of the Regional Water Supply Scheme to provide water from Lake Skadar to the Municipality of Bar. It is anticipated that, in a follow-up project, the water supply will be extended southwards to Ulcinj and the tourist areas of Valdanos and Velika Plaža.
The World Bank provides a total amount of US$10 million in concessional terms. The credit has a maturity of 20 years, with a 10 years grace period.

Energy supply

Given the dynamic rates of economic growth in Montenegro, the power supply situation is anticipated to tighten considerably over the medium term, which makes continued energy sector reform a critical element of policies aimed at fostering socio-economic development in Montenegro.
The World Bank’s energy project will thus support Montenegro in implementing its program for power-market liberalization and its integration into the South-Eastern European energy market. More specifically, the project will support necessary investments that should help to ensure the security and reliability of electricity supply to the population, including through measures aimed at integrating further Montenegro’s electricity sector with the regional market.
The investment projects financed by this project aims at improving the performance of the power sector, achieving fiscal sustainability, and encouraging private sector-led growth. The World Bank provides a total amount of US$9 million, with the same conditions.

The World Bank has worked closely with the Montenegrin authorities in both sectors, and the implementation of these projects will benefit from both the experiences gained and the lessons learnt from previous projects and — with the recent establishment of the World Bank Country Office in Montenegro — the ability to strengthen further bilateral collaboration between the World Bank and the Government of Montenegro.

[1] The WORLD BANK was established at the International Conference of Bretton Woods, New Hampshire, USA, on July 1st-22, 1944. The World Bank Group Headquartered in Washington, D.C., with more than 100 country offices and approximately 10,000 employees worldwide, it’s one of the most important source of financial and technical assistance to developing countries around the world. The World Bank is not a bank in the common sense, but an association of two unique development institutions owned by 185 member countries:
• The International Bank for Reconstruction and Development (IBRD); and
• The International Development Association (IDA).
Each institution plays a different but supportive role in our mission of global poverty reduction and the improvement of living standards. The IBRD focuses on middle income and creditworthy poor countries, while IDA focuses on the poorest countries in the world. Together these two bodies provide low-interest loans, interest-free credit and grants to developing countries for education, health, infrastructure, communications and many other purposes.
On January 18, 2007, Montenegrin Finance Minister Igor Luksic signed the Articles of Agreement of the IBRD, making Montenegro the 185th member state of the World Bank Group. In addition, Montenegro also joined the IDA (166th), the International Finance Corporation (IFC; 179th) and the Multilateral Investment Guarantee Agency (MIGA; 170th).