Montenegro needs more than €1 billion over the next decade for drinking-water and wastewater infrastructure, while the World Bank is preparing a new programme focused on investment, utility performance and climate resilience. Project documents estimate €580 million for drinking-water infrastructure and another €471.5 million for wastewater collection and treatment, bringing the combined requirement above €1.05 billion. The investment gap comes as tourism and real-estate development increases pressure on municipal networks, which face high water losses and limited wastewater treatment capacity.
World Bank Prepares $58 Million Programme
The World Bank is preparing the first phase of the Montenegro Water Services and Climate Resilience Project, currently estimated at $58 million. Indicative financing includes $35 million from the International Bank for Reconstruction and Development and $23 million from the OPEC Fund for International Development. Approval is provisionally targeted for October 30, 2026. The programme is expected to support infrastructure investment, stronger utility performance and climate resilience.
Water Losses and Wastewater Treatment
Around 68% of water entering municipal supply systems does not generate revenue, with losses attributed to leakage, inaccurate metering, unauthorised consumption and other causes. These losses reduce utility revenues while still generating costs for water treatment, pumping and distribution. Lower leakage could therefore reduce both water consumption and electricity expenditure.
Less than half of wastewater is currently treated, while coastal destinations face increasing demand from hotels, apartments and seasonal populations. Montenegro has attracted billions of euros in tourism and coastal property investment, while municipal infrastructure has often expanded more slowly. In some areas, summer water consumption approaches network capacity and wastewater systems face limitations in supporting further development.
International Financing and Coastal Capacity
Montenegro has already used EIB financing, EU grants and other programmes for water and wastewater projects in Ulcinj, Kolašin, Mojkovac, Rožaje and Nikšić. Municipal utilities differ significantly in technical capacity, staffing, tariff collection and financial performance. Some depend on municipal budgets or transfers to finance investment.
Regionalni vodovod has reported high seasonal flows to coastal municipalities, with parts of its main system operating close to capacity during the 2026 summer season. Pressure is increasingly concentrated in local distribution networks.
Climate and Financing Requirements
Higher summer temperatures, drought periods and changing rainfall patterns could increase pressure on water resources, while flooding and intense rainfall can strain drainage and wastewater systems. The €1.05 billion requirement will require multiple financing sources. EU grants, the EIB, EBRD, World Bank and other lenders, as well as municipal and national funding, could contribute to the investment programme.
Private financing may have a more limited role where projects cannot generate returns sufficient for conventional project finance. Montenegro is also preparing major investments in roads, railways, airports, energy and environmental infrastructure, creating additional demands on engineering, procurement and project-management capacity. Water projects can also require extensive permitting, property access and construction in populated areas.
