The European Bank for Reconstruction and Development (EBRD) will provide a loan of up to 30 million euros to the Railway Transport (ŽPCG) for the purchase of new rolling stock.
The loan, which will be guaranteed by the Montenegrin Government, will be used for the purchase of three electric multiple units (EMUs), which will operate across the railway network in the country.
EBRD has secured a loan of up to 30 million euros: Railway Transport is purchasing three electric multiple units
The project includes technical assistance to support project implementation and procurement, with 325 thousand euros from the EBRD shareholders' Special Fund.
The European Bank for Reconstruction and Development (EBRD) will provide a loan of up to 30 million euros to the Railway Transport (ŽPCG) for the purchase of new rolling stock.
The loan, which will be guaranteed by the Montenegrin Government, will be used for the purchase of three electric multiple units (EMUs), which will operate across the railway network in the country.
“The new rolling stock will replace the old, energy-inefficient locomotives currently in use, thus improving the comfort, quality, and reliability of transport services,” stated EBRD representatives.
The Government has identified the enhancement of railway passenger services as a priority for the development of the railway sector in the country and the promotion of modal shift from cars to rail transport.
The project includes technical assistance to support project implementation and procurement, with 325 thousand euros from the EBRD shareholders' Special Fund.
Additionally, 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 the Montenegrin Minister of Finance Novica Vuković, the Executive Director of ŽPCG, Ilinka Pavićević, the Head of the EBRD Office in Montenegro Remon Zakaria, and the EBRD Director for Infrastructure for Europe, the Middle East, and Africa, Sue Barrett.
Vuković stated that it is a pleasure for them that EBRD has been a strategic partner for many years, investing over 800 million euros through various investments, including in transport infrastructure.
“The credit arrangement signed today between ŽPCG and EBRD, with the state guarantee, will enable the purchase of up to three sets of four-car electric multiple units, which ŽPCG will use across the entire railway network of Montenegro. The new rolling stock will replace the old, energy-inefficient units with locomotive traction currently in operation,” said Vuković.
Moreover, as he added, the project will support the development of the railway transport sector through the modernization of the rolling stock, which will significantly reduce carbon emissions by shifting from road to rail transport.
“It is clear that the introduction of environmentally friendly solutions is no longer a trend, but a real necessity and direction to choose. I take this 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),” Vuković stated.
Pavićević announced the commencement of one of the largest investment projects related to the modernization of the rolling stock of Montenegrin Railways.
“This is a credit arrangement being implemented with the support of the EBRD bank amounting to 30 million euros, which will be intended for the purchase of new electric multiple units for domestic railway passenger transport. After almost 13 years, we have the opportunity to announce the procurement of new trains that will significantly improve the quality of railway service in Montenegro,” said Pavićević.
She explained that after the signing of the loan agreement and the guarantee agreements, the selection of consultants for this project will follow, which will be conducted in accordance with the EBRD's public procurement policies and rules.
“After the selection of consultants, an international two-phase tender for the procurement of new trains will be announced and conducted, about which interested parties and the public will be timely informed,” Pavićević noted.
Barrett assessed that the signing of the loan agreement demonstrates EBRD's continuous support for the Montenegrin railway sector by assisting the railway operator in providing better services to its passengers.
“This project will also help promote the use of green and safe transport in line with the Bank's goals for green economies. 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 economic and regional integration of Montenegro,” Barrett stated.
Zakaria believes that the procurement of electric multiple units will significantly improve safety, quality, and comfort.
“Passengers can expect more reliable and punctual railway services, which will lead to increased satisfaction and trust in the national railway system. Replacing old, energy-inefficient locomotives with new electric multiple units will significantly reduce energy consumption and, consequently, harmful gas emissions,” Zakaria said.
According to him, this transition to an environmentally friendly rolling stock aligns with Montenegro's commitment to sustainable development and the reduction of harmful gas emissions.
“We are confident that this loan will play a key role in transforming railway services, providing tangible benefits to both the operator and passengers,” Zakaria concluded.
Since Montenegro joined EBRD, the bank has invested over 800 million euros in 86 projects.
The bank's priorities in Montenegro are supporting competitiveness, green transition, and its further integration into regional and global markets.