Montenegro has selected a PowerChina-led consortium to design and build the 22-kilometre Mateševo-Andrijevica section of the Bar-Boljare motorway for €693.97 million, with European institutions providing part of the financing and procurement oversight. The competitive process also included a Cengiz-Azvirt consortium and China Communications Construction Company.
The project differs from the first Bar-Boljare section through its financing and governance structure. The European Bank for Reconstruction and Development (EBRD) has committed a €200 million sovereign loan, while the European Union has provided a €150 million grant.
Procurement was conducted under EBRD procedures, and the project has been classified as Category A for environmental and social risk. IRD Engineering received a separate supervision contract valued at €14.45 million excluding tax. Montenegro remains responsible for arranging the remainder of the project financing. The construction contract is approximately €344 million higher than the identified EBRD and EU support, before accounting for land, supervision, contingencies and financing costs. The difference does not represent a final financing gap because the state can provide budget funding or arrange additional borrowing.
The first Bar-Boljare section provides a different financing precedent
The Smokovac-Mateševo section was constructed by China Road and Bridge Corporation and financed through a large US-dollar loan from China Exim Bank. The section included major tunnels and bridges and addressed significant engineering challenges. Its bilateral financing structure, debt exposure, delays and transparency concerns subsequently became associated with Montenegro’s infrastructure-financing risks.
Montenegro later hedged its currency exposure and reported cumulative savings when it paid the ninth instalment of the China Exim Bank loan in 2026. The new section is being developed through open competition and includes a published environmental assessment, lender remedies, a grievance mechanism and independent supervision. The contract nevertheless remains exposed to construction and implementation risks. The Mateševo-Andrijevica section is planned to contain approximately 3.6 kilometres of tunnels and 21 bridges.
Geological conditions, expropriation and environmental mitigation can affect both cost and scheduling. Design-and-build contracting transfers certain design responsibilities to the contractor but does not eliminate unforeseen ground conditions or other physical risks.
Economic benefits depend on wider motorway connections
The Mateševo-Andrijevica section is intended to improve safety and access in northern Montenegro, while its wider economic impact depends on additional connections towards Serbia and improvements along the route to Bar. The expected public benefits include changes in traffic, freight travel times, tourism distribution and regional development. Toll revenue represents only one component of the project’s potential economic returns.
Construction activity is expected to involve local companies supplying aggregates, concrete, transport, accommodation, equipment and other works. The project also creates a potential longer-term benefit through improved access for northern producers, logistics operators and labour markets once construction is completed. The €150 million EU grant reflects network and cohesion benefits that cannot necessarily be captured through toll revenue alone. The EBRD financing brings procurement and environmental requirements into the project structure.
Montenegro nevertheless retains demand and completion risks beyond contractual remedies, as well as the opportunity cost associated with allocating public resources to the motorway rather than other infrastructure and public investments.
Supervision and project reporting form part of the financing structure
The project includes European procurement procedures, environmental and social safeguards, a grievance mechanism and independent supervision. A comprehensive public reporting system would cover the contract value, land costs, supervision, financing, claims, contingencies and physical progress. Variation orders would identify their causes and the parties responsible for them, while environmental and resettlement obligations would be tracked alongside construction progress.
Lender disbursements could also be compared with completed works through regular reporting. The project combines construction capacity from a Chinese-led consortium with financing and standards partly provided by European institutions, while Montenegro retains ownership and responsibility for the project’s remaining financing. The effectiveness of the framework will depend on the application of its procurement, environmental, financial and supervision requirements throughout construction.
