The EBRD is lending €11mn to Airports of Montenegro, the state-owned company, to enable two local airports to complete their modernisation plans, helping them to comply with levels of safety and services required by the International Civil Aviation Organisation.

The 15-year loan, backed by the government of the Republic of Montenegro, will help finance the new passenger terminal building at Podgorica airport, the extension and repair of its aircraft movement areas and the rehabilitation of the terminal building. The loan will also help extend the terminal building at Tivat airport and support the purchase of fire-fighting, aviation security and ground-handling equipment at both airports. Alongside the EBRD’s finance is an €11.5mn loan from the European Investment Bank, and the company itself is providing €6.5mn towards the project. Technical cooperation funding in support of this project has been provided by the European Union and France.

The air transport industry in Serbia and Montenegro has suffered from the rigidities of a command economy, years of conflict and economic isolation, and a severe shortage of equipment and spare parts.

Dragica Pilipovic-Chaffey, the EBRD’s director for Serbia and Montenegro, claims the project will help tackle these issues, strengthening a key transport sector, and ultimately lift Montenegro’s two principal airports to international standards and practices. It should also help commercialise the air transport sector, benefiting tourists, businesspeople and local citizens. The European Agency for Reconstruction and USAid are providing technical cooperation funds to help strengthen management within the company and improve corporate capabilities.