Strengthened Fiscal Reserve for 2027 and 2028 – State Secures €400 Million

The funds from this arrangement are not intended to finance new current-policy measures or increase current budget spending, but rather to strengthen the fiscal reserve and reduce refinancing risks. The state’s total financing needs in 2027 are estimated at approximately €2.1 billion, of which around €1.5 billion relates to obligations arising from maturing debt, while the remainder will finance capital and development projects of strategic importance. The year 2027 will be particularly challenging, as Montenegro faces debt repayments of nearly €1.2 billion. Due to the concentration of high obligations in the coming period, the Ministry of Finance is securing funds in advance by taking advantage of favourable market conditions, thereby reducing exposure to future market fluctuations and enabling more secure planning of the state’s obligations. A particular strength of the transaction is that, for the first time in such a syndicated loan arrangement, a seven-year maturity was agreed. The loan was concluded at an interest rate equal to the six-month EURIBOR plus a 2.5% margin, with repayments scheduled semi-annually. The maturity and financing terms achieved confirm the confidence of international financial institutions in Montenegro and its economic prospects, during a period of strong progress in the European integration process and positive assessments from international credit rating agencies. The longer maturity also contributes to a more even distribution of future obligations and greater resilience of public finances. The loan arrangement was concluded with a group of renowned international financial institutions (Merrill Lynch International, KfW IPEX-Bank, Banco Finantia, First Abu Dhabi Bank, Banco Bilbao Vizcaya Argentaria, S.A., OTP Bank Group, Erste Group, Intesa Sanpaolo and Eurobank Private Bank Luxembourg). The inclusion of new international lenders further expands and diversifies Montenegro’s base of financial partners. The conclusion of the arrangement was preceded by detailed analyses of international financial trends, with the aim of securing financing in a timely manner and on favourable terms for the state. Through this transaction, Montenegro is further strengthening its financial position ahead of years with high public debt maturities.