The Government of Montenegro, upon the proposal of the Ministry of Finance, has adopted an information document regarding the initial framework for issuing bonds on the international market. This decision is based on the Budget Law and the Borrowing Decision for this year, which was approved by the Montenegrin Parliament.
The planned funds are exclusively intended for repaying old debts and financing capital expenditures. A major portion of the debt refers to bonds issued in 2018, which are due for payment in early April.
The Ministry of Finance has ensured that the cost of interest on accumulated debt, due in 2025, amounting to approximately 160 million euros, will be financed through current revenues while regularly servicing ongoing obligations. The Ministry is closely monitoring international and domestic markets to determine the most favorable time for executing financial arrangements.
The government has been proposed to consider issuing bonds on the international market to secure part of the funds planned under the Borrowing Decision for 2025. This decision anticipates raising 1.14 billion euros, primarily for repaying past debt (around 820 million euros) and funding capital expenditures.
This year, the country will use deposits secured in 2024 and funds from new financial arrangements to meet these obligations, which include the payment of the 2018 Eurobond (500 million euros), loans from the World Bank (around 55 million euros), a Chinese loan for the Bar-Boljari highway (60 million euros), and other obligations totaling about 170 million euros.
The majority of the old debt is due during the mandate of the 44th Government. By 2027, Montenegro faces around 2.1 billion euros in debt repayments, as well as approximately 565 million euros in interest.
The funds raised through upcoming financial arrangements will only be used for repaying existing debt, funding the capital budget, and creating fiscal reserves for future years. No new budgetary expenses will be financed through loans, except for capital expenditures, in line with the principle that current obligations should be covered by current revenues.
The bond issuance is seen as a responsible approach to avoid financial risks, ensure stability, and provide a fiscal reserve for obligations not created by the current government. The Ministry of Finance will continue to secure the necessary funds and will inform the public transparently.
