Montenegro is projected to face a shortfall of 1.14 billion euros for debt repayment and capital expenditures. In 2026, the deficit will be slightly lower at 800 million euros, specifically for debt repayments and capital investments.

Particularly challenging will be the year 2027, when a shortfall of 1.26 billion euros is anticipated.

Over the next three years, the budget is expected to allocate 3.2 billion euros for debt settlement and financing capital investments. This information is included in the draft program for economic reforms from 2025 to 2027, in which the government has provided projections for national and public debt, based on the forecasts established in the fiscal strategy for 2024. To 2027, as reported by eKapija.

The borrowing levels in these coming years will largely be influenced by the amounts of missing funds outlined in the Fiscal Strategy for 2024-2027.

Among the debts that Montenegro will need to address in the next three years, a significant portion consists of foreign and domestic bonds, repayments to the Bank of the Bar – Boljare, Deutsche Bank from the year 2023, and PBG agreements with the World Bank.

According to the report, the largest repayments are related to Eurobonds amounting to 500 million euros, followed by domestic bonds that are due for collection in 2026, valuing at 50 million euros, and Eurobonds maturing in 2027 totaling 750 million euros.

To address the funding gap for 2025, the Ministry of Finance (MoF) has secured a Development Policy Loan (DPL) arrangement worth 180 million euros, with 80 million sourced from the World Bank’s Development Agency (AFD) and the OPEC International Fund, each contributing 50 million euros. The MoF is also negotiating with the World Bank for a guarantee that would allow for a more favorable loan of up to 250 million euros from commercial banks, moving away from the second-favored DPL of 80 million euros.

In 2026, approximately 353 million euros will need to be sourced for debt repayment, primarily concerning regular repayments of loans from the Chinese EXIM Bank and Deutsche Bank, as well as domestic bonds owed from 2019 amounting to 50 million euros.

The requirement for 2027 is about 972 million euros, mainly for the repayment of bonds issued in 2020, which total 750 million euros, along with regular loan repayments to the Chinese Exim Bank and the World Bank. Thus, as noted in the draft, the Ministry of Finance is planning to set aside fiscal reserves for 2027.

The government, as mentioned in the document, aims to cover part of the funding needs through the issuance of state bonds intended for institutional investors and citizens (retail bonds). The issuance of state bonds will enable citizens to invest excess funds under more favorable conditions, as stated in the draft.

Expected Growth in State Debt

The draft program for economic reforms from 2025 to 2027 indicates that the Government of Montenegro anticipates an increase in state debt of approximately 228.8 million euros in 2025. The expected growth for 2026 is around 515.7 million euros, and for 2027, it is projected to be about 260 million euros.

The report notes that the movement of debt significantly impacts the financing of infrastructure and development projects.

As highlighted in the draft, Montenegro has received about 383 million euros in support for regional growth, with approximately 255 million earmarked for development and infrastructure projects, and 127 million in grants.

It is important to note that infrastructure projects funded through this EU program must be completed by the end of 2028.