EBRD lends up to €30 million to Željeznički Prevoz Crne Gore a.d.

• EBRD to provide €30 million loan to Željeznički Prevoz Crne Gore a.d.
• Loan to buy new rolling stock that is safer, more comfortable and more energy efficient
• Better passenger services a key rail development priority for the government of Montenegro

The European Bank for Reconstruction and Development (EBRD) is providing a senior loan of up to €30 million to Željeznički Prevoz Crne Gore a.d. (ZPCG), the passenger train operator in Montenegro.

The loan, which will be guaranteed by the government of Montenegro, will be used to purchase three electric multiple-unit (EMU) trains, which will run across the country's rail network. The new rolling stock will replace the old, energy-inefficient, locomotive-hauled trains currently in operation and will improve the comfort, quality and reliability of transport services.

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

The project includes technical assistance to support project implementation and procurement, with €325,000 in funding from the EBRD's Shareholder Special Fund. In addition, the company will receive technical assistance support and funding from the EU Reform Facility to enhance its corporate governance practices, standards and public service contract.

The signing was attended by Montenegrin Minister of Finance Novica Vuković, Minister of Transport and Maritime Affairs Filip Radulović, Ilinka Pavicević, Executive Director of ZPCG, Remon Zakaria, Head of Montenegro for the EBRD, and Sue Barrett, Director, Head of Infrastructure for Europe, Middle East and Africa at the EBRD.

Novica Vuković, Montenegrin Minister of Finance stated: "It is our pleasure that the European Bank for Reconstruction and Development has been our strategic partner for many years, both through the public and private sectors, investing over 800 million euros through various investments, including traffic infrastructure. Today, the signed credit arrangement between the Railway Transport of Montenegro and the EBRD, with the guarantee of the State, will enable the purchase of up to three sets of four-part electric motor sets, which will be used on the entire railway network of Montenegro. The new rolling stock will replace the old, energy-inefficient locomotive-hauled sets that are currently in use. Also, 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 would like to take this opportunity to thank you for the exceptional cooperation and continuous support in the financing of projects that will enable Montenegro to achieve its key foreign policy goal, which is full membership in the European Union."

Ilinka Pavicević, Executive Director of ZPCG stated: "On behalf of the Railway Transport of Montenegro, I am pleased to announce 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 local 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. 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 public procurement policy and rules of the EBRD Bank. 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 the interested parties and the public will be informed in due time".

Sue Barrett, EBRD Director, Head of Infrastructure for Europe, the Middle East and Africa, said: "The signing of this loan today demonstrates the EBRD's continued support for Montenegro's railway sector by helping the train operator provide better quality rail services for its passengers. This project will also help to promote the use of green and safe transport, in line with the Bank's green economy objectives. The EBRD is committed to further supporting the sustainable development of Montenegro's transport infrastructure in cooperation with its partner institutions, with the aim of promoting the country's economic and regional integration."

Remon Zakaria, EBRD Head of Montenegro, said: "The acquisition of these EMU sets will significantly improve the safety, quality and comfort of ZPCG's services. Passengers can expect more reliable and punctual train services, leading to increased satisfaction and trust in the national rail system. Replacing the old, energy-inefficient, locomotive-hauled trains with new EMUs will significantly reduce energy consumption and, hence, emissions. This transition to more environmentally friendly rolling stock aligns with Montenegro's commitment to sustainable development and to reducing its carbon footprint. We are confident that this loan will play a pivotal role in transforming Montenegro's railway services, delivering tangible benefits to both operator and passengers."

Since Montenegro joined the EBRD in 2006, the Bank has invested more than €800 million in 86 projects there. The Bank's priorities for the country are to support competitiveness, the green transition and its further integration into regional and global markets.

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