Montenegro is progressing preparations for a roughly €55 million World Bank-backed water security and climate-resilience programme, with discussions moving toward municipal priorities and financing arrangements. Government ministries and World Bank representatives are working on implementation steps for the WASEC water security and climate-adaptation project, which is intended to support water supply, municipal infrastructure and resilience to drought and other climate-related risks.
The programme has not received final approval, while financing negotiations are still pending. The government has identified faster progress as a priority following severe water shortages in parts of northern Montenegro during the summer.
Municipal Projects and Financing Priorities
Montenegro faces broader investment requirements in drinking-water networks, wastewater treatment, flood protection and climate resilience. Municipal utilities also continue to face high water losses and differing levels of investment capacity.
World Bank assessments have indicated that the country requires hundreds of millions of euros in additional water-sector investment over the coming decade. The WASEC programme would address only part of that requirement and could provide another financing platform alongside programmes supported by the European Investment Bank, the EU and other international financial institutions.
A key issue for municipalities will be selecting projects that can be financed and implemented. Local governments often have significant infrastructure needs but lack technical documentation, financing plans or administrative capacity needed to develop bankable projects. Current discussions are therefore moving from national strategy toward specific municipal priorities and financing structures. Potential investments include rehabilitation of existing networks, new water-supply infrastructure, drought-resilience measures and improvements in utility operations.
Focus on Northern Water Systems
Northern municipalities are expected to receive particular attention following water-system vulnerabilities exposed during the 2026 summer, especially in areas with smaller systems and weaker fiscal capacity than the coast or Podgorica.
Climate conditions are increasing pressure on water infrastructure. Longer dry periods and higher summer temperatures can reduce available water while raising consumption, while intense rainfall can overwhelm drainage systems and damage infrastructure. Future investments therefore need to account for greater variability rather than historical averages.
Water Infrastructure and Economic Activity
Water security also affects tourism, agriculture, housing development and industrial investment, all of which depend on reliable supply. Infrastructure constraints can limit construction and reduce the attractiveness of locations for new business activity. The financing structure will also be significant because many municipal water projects generate insufficient cash flow for conventional commercial borrowing, particularly where tariffs remain below full cost recovery. This increases the potential role of concessional lending, government support and grants.
Utility Losses and Infrastructure Management
Reducing water losses could increase effective system capacity without requiring entirely new supply infrastructure. Montenegro’s municipal systems lose significant volumes through leakage, inadequate metering and other forms of non-revenue water.
Network rehabilitation and improved management are therefore relevant alongside new construction. The World Bank has linked water-sector financing with institutional improvements, including stronger billing, asset management, maintenance and investment planning. These measures are intended to support the financial sustainability of new infrastructure and reduce the risk of deterioration caused by insufficient maintenance.
Implementation Capacity
Implementation capacity remains another challenge. Montenegro is entering a broader infrastructure investment cycle covering motorways, railways, airports, energy and environmental projects, while engineering and public-sector project-management resources are limited. Municipal water projects can also face property issues, procurement procedures, utility coordination and construction in populated areas, potentially extending delivery schedules even when financing is available. The current government discussions with the World Bank are therefore focused on addressing these issues before financing is committed.
Next Steps for the WASEC Programme
The €55 million programme would represent a significant investment for Montenegro, while its scale also means that inadequate project preparation could materially affect its impact. The next steps are completion of financing negotiations, formal project approval and identification of the first municipal investments. Until those stages are completed, the programme remains under preparation rather than implementation.
