Montenegro signs EUR 50 million loan agreement with France’s AFD

Montenegro and France have signed agreements on a EUR 50 million loan to support environmental protection policies and a EUR 950,000 grant to help strengthen Montenegro’s electricity transmission system.

The loan agreement between the Ministry of Finance of Montenegro and Agence Française de Développement (AFD) is aimed at supporting reforms in waste management, renewable energy, sustainable forestry, and climate action.

The agreement, signed by Minister of Finance Novica Vuković and AFD head of department for Europe, the Middle East, and Asia Cyrille Bellier, represents a significant milestone for Montenegro on the path of sustainable development, according to the Government of Montenegro. The signing was attended by Montenegrin Prime Minister Milojko Spajić and French Ambassador to Montenegro Anne-Marie Maskay.

Supporting a series of crucial reforms in key sectors such as waste and energy, the partnership seeks to reduce pollution, promote clean energy, and improve climate resilience, the government added.

Montenegro will harmonize its environmental protection, energy, and climate change standards with the EU

The cooperation also includes phasing out single-use plastics, an expanded plan for waste producer responsibility, a legal and regulatory mechanism for carbon pricing, and an institutional reform of forestry.

Montenegro will harmonize its standards with the EU on environmental protection, energy, and climate change and lay the foundations for a greener economy, according to the government.

Along with the EUR 50 million loan, AFD will provide technical assistance to strengthen Montenegro’s institutional capacity in energy and waste management, ensuring the effective implementation and monitoring of these reforms.

The program is co-financed by the World Bank

Noting that the loan is the first ever signed with AFD, Vuković said he expected the partnership to continue.

Cyrille Bellier stressed the importance of this green development program for achieving Montenegro’s strategic priorities in line with the Paris Agreement and the EU acquis.

According to the government, the program is co-financed by the World Bank. The EUR 130 million joint financing by AFD and the World Bank provides a major boost for Montenegro in its efforts to join the EU and implement the Green Agenda.

Technical assistance for Montenegro’s TSO

Montenegro’s transmission system operator (TSO), Crnogorski Elektroprenosni Sistem (CGES), has signed an agreement with AFD and RTE International on a grant for technical support. Its goal is to bolster the country’s energy transition and align it with the EU, CGES said.

The support refers to a project to overhaul and expand the 225/110 kV substation Perućica and replace two outdated transformers at the Pljevlja substation, both critical to the stability of the national grid. The aim is to boost the grid’s capacity to integrate new renewable energy sources and reduce losses, contributing to Montenegro’s goal to achieve carbon neutrality by 2050, according to the company.

The program, worth EUR 950,000, includes studies for the application of digital solutions and optimization of grid management and monitoring. The strategic project is financed by AFD, with the technical assistance of RTE International, a subsidiary of the French TSO, RTE.

The agreement was signed by CGES CEO Ivan Asanović, Thierry Buhagiar from RTE International, and Cyrille Bellier.