Montenegro Hopes EU Will Help it Repay Chinese Highway Loan

Construction workers on the first phase of Bar-Boljare highway, Montenegro. Photo: Government of Montenegro

Spajic explained that the government was looking for ways to finance its largest infrastructure project under more favourable conditions.

"Montenegro is negotiating with European partners to find a way to most favourably finance projects in the country, including the highway. We didn't ask someone else to repay our debts but to potentially refinance them under more favourable conditions," Spajic told Nova.rs. media outlet.

The Bar-Boljare stretch represents the Montenegrin leg of a highway that will run from its Adriatic coast to the Serbian capital, Belgrade.

The Montenegrin leg is being built by the China Road and Bridge Corporation, CRBC. The first section is 85-per-cent financed by a $944 million loan from China's Exim Bank.

The first annual repayment of $67.5 million falls in July.

According to state data from December 2020, Montenegro's public debt was then equal to 90.85 per cent of GDP, while the cost of the 41-kilometer first phase of the highway alone was estimated to be equal to 45 per cent of GDP.

On March 18, Deputy Prime Minister Dritan Abazovic called on the EU to help Montenegro replace the debt owed to Exim bank with a loan from a European bank, stressing that this would help curb Chinese influence.

But on April 12, European Commission spokesman Peter Stano said the EU would not help Montenegro repay its loan, even if it sympathised with the aim of reducing dependence on China.

"Talking specifically about Montenegro and China, the EU has concerns over the socio-economic and financial effects of some of China's investments which can have effects in the country," he said.

"There is...