The government of Montenegro is currently in advanced discussions with the World Bank to secure a loan of up to €18 million aimed at modernizing the national forestry sector. This initiative seeks to enhance institutional capacity and improve the competitiveness of the domestic wood industry over the next decade, as reported by government officials.
The proposed financing will be formalized through the International Bank for Reconstruction and Development (IBRD), which is the lending arm of the World Bank. The project, titled “Montenegro’s Forests For Shared Prosperity,” is designed to promote sustainable forest management practices, improve fire prevention and response strategies, and refine regulatory frameworks governing forest resources and the broader wood value chain.
Pending approval from the World Bank’s Board of Directors in the upcoming months, the financing agreement includes a 15-year repayment term with a two-year grace period. The interest rate will be variable, linked to six-month EURIBOR plus a margin, along with modest fees for loan processing and any undrawn funds.
For the past two years, Montenegro’s Ministry of Agriculture, Forestry and Water Management has been collaborating with World Bank specialists on project preparation. Government planners have indicated that this funding is expected to enhance sustainable forest resource management, improve economic outcomes within forestry and wood processing sectors, and boost overall profitability.
Budget documents reveal that approximately €4.95 million of the loan will be allocated to strengthening public policies and institutional capabilities. This includes modernizing measurement and traceability of forest assets and supporting the newly established state forestry enterprise “Crna Gora Šume.” An estimated €9.5 million is designated for enhancing resilience against wildfires and rehabilitating forest ecosystems, while the remaining funds are intended for capacity building in certification, standardization, and project management.
This initiative is set to involve various national institutions, including the forestry and hunting administration, emergency services under the Ministry of Internal Affairs, Montenegrin statistical agency Monstat, and the University of Montenegro through education and training programs related to sustainable forest practices.
In an effort to ensure transparency regarding loan terms and implementation plans before final Board approval, government officials have announced plans for public consultations and detailed project presentations for stakeholders in the coming weeks.
This engagement with the World Bank aligns with broader initiatives aimed at supporting rural livelihoods, mitigating wildfire risks, and strengthening Montenegro’s environmental governance framework in accordance with sustainable forest management principles and international lender standards.
