Full Breakdown
Montenegro Advances Bar-Boljare Highway Project with EU Funding
2/28/2026, 11:07:34 AM
Overview of the Bar-Boljare Highway Project
Montenegro's state road construction company, Monteput, has signed a €693.9 million agreement with the PowerChina-Stecol consortium to construct the second section of the Bar-Boljare highway. This phase, known as Matesevo-Andrijevica, is part of a larger 165-kilometer highway intended to connect Montenegro’s Adriatic port of Bar to Serbia. Unlike the first section, which was financed through Chinese loans, this project will be funded primarily through European Union resources, marking a significant shift in Montenegro's infrastructure financing strategy.
Financing Structure and Project Details
The financing for the Matesevo-Andrijevica section will include a €200 million loan from the European Bank for Reconstruction and Development (EBRD), a €150 million grant from the European Union, and additional funds from Montenegro’s national budget. Monteput CEO Milan Ljiljanic stated that the Chinese contractor was selected through an international tender conducted under EBRD guidelines, ensuring compliance with technical requirements. The construction is expected to begin in late April, with a completion timeline of five years, followed by a two-year defect liability period.
Economic Implications
The new highway section aims to enhance internal and regional connectivity, particularly benefiting Montenegro’s economically underdeveloped northern regions. Ljiljanic emphasized that this project reflects a responsible financing model and a strong partnership with international institutions, indicating a strategic pivot towards Western financial support while still utilizing Chinese construction expertise.
Criticism and Concerns
The first section of the Bar-Boljare highway, the Smokovac-Matesevo stretch, completed in 2022 at a cost of approximately €1 billion, faced significant criticism. Detractors pointed to its high costs and the reliance on Chinese financing, with Montenegro currently owing €655 million to China’s Exim Bank for this phase. Critics have described the highway as leading “from nothing to nowhere,” citing its failure to connect major urban or business centers despite traversing challenging mountainous terrain. Montenegrin officials defended their choice of the Chinese contractor, asserting that no Western firms had submitted competitive bids capable of meeting the project's technical demands.
Official Statements and Responses
Milan Ljiljanic remarked, “This demonstrates a responsible financing model and strong partnership with international institutions,” highlighting the project's shift towards EU funding. The Montenegrin government continues to advocate for the highway's potential to stimulate economic growth and improve connectivity.
Conclusion
The Bar-Boljare highway project illustrates Montenegro's dual approach to infrastructure development, balancing engagement with Western financial institutions while still relying on Chinese construction capabilities. As the country navigates its economic future, the outcomes of this project will be closely monitored for their impact on regional connectivity and debt management.
