The European Investment Bank (EIB), the bank of the European Union, will lend € 50 million to the Montenegro Investment and Development Fund (FID) to support the faster recovery of the local economy after the COVID-19 and help introduce practical energy saving among small businesses nationwide. The EIB loan signed today in an online ceremony creates a new, more affordable source of financing for Montenegrin companies operating in the sectors of infrastructure, industry, transport, innovation, l agriculture and tourism, some of the hardest hit sectors.
Funds will be made available on favorable terms to help small and medium-sized enterprises (SMEs) solve their liquidity problems, support employment, increase competitiveness and improve energy efficiency practices. The EIB loan is the latest in Team Europe’s support measures to accelerate the COVID-19 recovery of regional economies and effective climate action. It provides much needed funding for the climate and environmental sustainability of the Western Balkans to enable a faster transition to a sustainable, green and circular economy.
EIB Vice-President Lilyana Pavlova, who is responsible for operations in Montenegro, said: “This operation addresses the two most important global economic and social issues of our time: the recovery linked to COVID-19 and the climate action. As the EU’s climate bank, the EIB aims to ensure that Montenegro and the Western Balkans continue to benefit from access to affordable finance and technical assistance for climate and green investments. ensure that green investments fuel economic and social development, regional integration, cohesion and the EU accession process. We are actively seeking partners across the region to improve energy efficiency, reduce the carbon footprint and transform regional economies into more competitive economies and region and Europe. “
Irena Radović, Executive Director of the Montenegro Investment and Development Fund, said: “The economic crisis caused by the COVID-19 pandemic continues to be a source of uncertainty, but also offers an opportunity for Montenegro to ” ensure a resilient, inclusive and post-pandemic green recovery environment. The importance of our long-standing partnership with the EIB and today’s event cannot be overstated. As the National Financial Development Institution of Montenegro, we are proud and passionate to lead the green transition and economic transformation in close cooperation with the EIB and being the first signatory of such an operation for action climate in the Western Balkans. This operation will further boost the prospects for a faster green and inclusive recovery and help local small, medium and medium enterprises to improve their social impact on gender equality and youth employment, and encourage companies to employ people from society l groups. As such, the greening of Montenegro’s economy becomes a decisive factor in our competitiveness and our ability to attract international finance and investment. ”
Milojko Spajić, Minister of Finance and Social Protection of the Government of Montenegro, said: “We are doing everything possible in these difficult times to improve the standard of living of our people, including by strengthening micro, small and medium enterprises. 98% of all existing businesses and greatly contribute to stable economic development, creating the ideal conditions for Montenegro to become a new EU member state. Their development affects GDP growth and the creation of new jobs. At the same time, the greening of our economy is what could really increase the competitiveness of Montenegro, as a small country with great opportunities. This type of funding will help micro, small and medium-sized enterprises not only to make their businesses more sustainable after the COVID-19 crisis, but also to develop them further. I would like to express my gratitude to our partner – the EIB – who, by recognizing the importance of the transition to a green economy, helps us to provide better and healthier living conditions for young Montenegrins. ”
Oana Cristina Popa, EU Ambassador to Montenegro, said: “Small and medium-sized enterprises are the backbone of the Montenegrin economy, generating the majority of jobs and added value. The European Union has always supported the SME sector, in particular through the Instrument for Pre-Accession Assistance (IPA), helping them to meet the challenges and increase the overall competitiveness of the economy. We will continue our efforts to support small and medium-sized enterprises during IPA III (2021-2027). Combined with EU support for SMEs provided under the instrument, the EIB loan agreement will allow the recovery of the Montenegrin economy and will contribute to its green transition. ”
This is the second loan signed with the IDF since the start of the pandemic, after an investment of 50 million euros signed in September 2020 to support the COVID-19 recovery of more than 150 Montenegrin small and medium-sized businesses. Including the loan signed today, the EIB and the FDI have signed six operations so far, unlocking € 470 million in investments for the Montenegrin economy.
The latest operation will also help create new employment opportunities for young people through special loan conditions provided under the European Initiative for Youth Employment and Training in the Western Balkans (EYET). The French Development Agency also co-finances the IDF and provides technical assistance to help the fund develop a strategy, guidelines and resources for climate action investments.