Montenegrin small and medium-sized enterprises (SMEs) and mid-caps in tourism and other sectors severely affected by COVID-19 will benefit from a €50 million loan that the European Investment Bank (EIB) has signed today with the Montenegrin Investment and Development Fund (IDF). The loan will provide immediate support for the faster recovery of the Montenegrin economy by unlocking more affordable financing for SMEs, mid-caps and public sector enterprises to sustain jobs and maintain their liquidity.
The loan is a part of the Team Europe Western Balkans COVID-19 recovery support programme, announced at the EU-Western Balkans Zagreb Summit in April. It provides affordable finance to businesses to ensure their continuity and faster and sustainable recovery from the pandemic. This facility is also the first allocation under the €500 million programme loan approved by the EIB Board of Directors in June 2020 targeting the public sector and national promotional banks in the Western Balkan region.
EIB Vice-President Dario Scannapieco said: “SMEs and mid-caps in Montenegro have been severely hit by the COVID-19 pandemic. With tourism being the main driver of economic growth, the EIB will help Montenegro face these unprecedented challenges, support its main source of income, recover faster and build a more resilient economy. Our more affordable loans will support other key sectors such as trade, transport and construction. We are proud to deliver this key component of Team Europe’s support package for Montenegro as a candidate country to join the European Union.”
Zoran Vukcevic, President of the Investment and Development Fund of Montenegro, said: “The European Investment Bank has once again shown that it is a true friend of Montenegro and a strategic partner of the Investment and Development Fund, with additional support in challenging and crisis moments, which are now experienced by the Montenegrin, as well as the world, economy. The cooperation of the Investment and Development Fund with the European Investment Bank, not only at this crisis moment, is of great importance for the IDF, and above all for the Montenegrin economy. The loan funds in response to the COVID-19 crisis will be used to preserve the liquidity of the economy and jobs, but also for development projects, which will contribute to the creation of new economic value in Montenegro and support the transformation of our economy towards a circular and sustainable system in the post-pandemic period that follows. So far, these funds have supported over 750 projects that have created and/or preserved over 25 000 jobs in Montenegro. I believe that these projects have given a special impetus to the development of the Montenegrin economy and strengthened its path of European integration.”
Oana-Cristina Popa, EU Ambassador and Head of EU Delegation to Montenegro, said: “SMEs are the backbone of Montenegro’s economy, generating more than three quarters of employment and almost 70 percent of value added. Even before the COVID-19 crisis struck, SMEs faced numerous challenges such as difficult access to finance, red tape, inadequate infrastructure and an insufficiently skilled workforce. The EU has traditionally been supporting the SME sector, helping it to tackle those challenges and increase competitiveness of the Montenegrin economy. At this time of unprecedented health and economic crisis, the EIB assistance is even more valuable as SMEs struggle to maintain liquidity and sustain jobs. Combined with the EU Delegation’s planned assistance to support micro and small enterprises in the aftermath of COVID-19, this loan agreement will provide a substantial foundation for a faster recovery of the Montenegrin economy.”
The EIB loan will be available at the IDF to individual entrepreneurs, companies and public enterprises operating in various sectors. This operation specifically aims to address the working capital, liquidity needs and investment constraints of SMEs and Mid-Caps in Montenegro in the context of the COVID-19 outbreak. The credit line will allow flexibilities to accelerate fund disbursement and address the most urgent liquidity and employment issues. It will encourage creating job opportunities and training for youth, under the initiative European Youth Employment and Training for the Western Balkans (EYET), promoting youth employment in Montenegro.
To date, the EIB and the IDF have signed five operations and disbursed €320 million to the Montenegrin economy, sustaining over 25 000 jobs.