Business Environment Macroeconomic Outlook Capital Market Banking Sector Privatization and Investments Economic Freedom Business News In the Spotlight Coming up...
Privatization and Investments This is testimony to the healthy economic political situation that the new government, led by Prime Minister Mr. Igor Lukšić, is promoting. In an interview with Reuters, Mr. Lukšić stated that Montenegro is expecting €600 million of foreign investment to be made in real estate, energy and tourism over the next couple of years. The Montenegrin economy will grow this year by around 2.5%, while during next year the level of growth is expected to reach somewhere in the region of 4%. This growth will be the result of foreign direct investments.
The new investors will clearly benefit from the new reforms and economic changes that are being made and the Montenegrin government is keen to ensure that it looks after the interests of investors. Being a small country, Montenegro is capable of making reforms that will benefit not only the government but also foreign investors. Already, many projects in the areas of energy and tourism are well underway.
Investments Exploration for Natural Gas is Getting Closer to Realization The Ministry of Economy of Montenegro and the consortium Trans Adriatic Pipeline have entered into a Memorandum of Understanding and Cooperation to explore the opportunities for developing a natural gas market and for enhancing the diversity of supplies in South East Europe. The Memorandum of Understanding for Cooperation is a significant step towards increasing the security of supply and for ensuring the diversification of gas resources in South East Europe. As natural gas has various applications in different fields it could also be used to underpin the further development of the Montenegrin economy in line with today’s environmental requirements.
The Battle for Black Gold in Montenegro Begins Companies such as Gazprom (Russia), Statoil (Norway), Total (France), ENI (Italy), Novatek (Russia), INA (Croatia), HESS Corporat (UK), and Sterling Energy PLC (UK) have sent letters of interest regarding the exploration of Montenegrin oil and gas reserves. This comes as good news, considering that regulations for the application of the law “On the Exploration and Production of Hydrocarbons” is currently being prepared. It is planned that this project will have a clear plan by the end of this year, or by the beginning of next year, when the results of the competition for this matter will be announced.)
Kempinski Signs Provisional Contract for a Montenegrin Resort As a capitol of tourism in Montenegro, Budva represents a great opportunity for foreign investors in term of tourism development. According to local authorities’ estimations, approximately EUR 1bn could be invested in building elite tourist facilities. The hotel chain Kempinski will sign the contract with the Russian company Was Invest, which had purchased about 200,000 square meters of land in Smokvica Montenegro. Provisional contract between these two parties has already been signed, while the formal one will be drafted in Berlin.
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Great Interest of the Italian Companies for Investing in Montenegro Montenegrin Investment Promotion Agency (MIPA) supported by Italian Institute for Foreign trade (ICE) held a conference about trade and economic opportunities in Montenegro on 8th June 2011. Over 150 Italian companies participated (a remarkable outcome for a country with only 600 thousand inhabitants). The event, which was opened with a country video presentation produced by MIPA, was widely considered to have been a success. The event had a very pragmatic approach. In the morning speakers from MIPA talked about investment opportunities and the facilities currently available from international organizations such as EBRD, WB and IEB. In the afternoon there were a number of B2B meetings with Italian companies, in which much more information was provided as a result of individual company requests. Later in the day, there were also a number of interviews including participants such as Petar Ivanović, CEO of MIPA and Luca Gentile, ICE officer for Italian Investments in Montenegro. Currently about 20 applications for Practical Cooperation in trade and investment have been received at MIPA. A delegation of Italian companies will therefore visit Montenegro in the autumn to check out its interesting potential. The contacts that were made with the representatives from the international institutions have helped to trigger a lively exchange of information and an interest in participating in future seminars in both Montenegro and in Rome. More specifically, the next planned event is being organized with the Abruzzo region and is expected to take place in Podgorica on July 7th. The event is about fishing and will involve the EBRD at the invitation of the ICE officer posted in Montenegro. It is also expected that there will be another event in Rome on September 15th at the Zero Emission Fair. This event will be attended by an expert from the Ministry of Energy of Montenegro. The Italian daily newspaper “La Repubblica” is about to publish an article about Montenegro, and its great upward trend in economic terms.
August 2011
KfW Bank Plans to Implement a €12.5 million Project in Montenegro Representatives from KfW bank and the Montenegrin Minister of Finance, Dr Milorad Katnić, met to discuss their previous cooperation which dates back to 2001. So far, their cooperation was only in the fields of infrastructure financing (energy and supply) and in funding local banks. However, future cooperation between KfW and Montenegro might well take place in the project “Water Supply and Wastewater Treatment on the Coast”, as well as with the energy sector. KfW is very interested in financing the “Energy Efficiency in Public Buildings” project, in which €12.5 million will be invested. The project will include the energy – efficient rehabilitation of about 30 school buildings in Montenegro. The start of this project is expected to take place on the fall 2011.
Turkish Investors Interested in the Airport at Berane A project for the reconstruction of the rundown Berane airport, which is located in North of Montenegro, seems to be of great interest to Turkish investors. Rafet Husović, minister in the Government of Montenegro, said that Turkish investors want to reconstruct the rundown airport at Berane. Official information about the investors has not yet been published, but according to some sources in the government, the Turkish company, Limak Holding, might be preparing to enter the Montenegrin market along with Turkish Airlines, which is rumored to be taking over Montenegro Airlines. The goal of this project is to make Berane airport functional for civilian flights by commercial airlines.
Brazilian Investors Interested in the Port of Bar The Port of Bar is receiving a lot of international attention from various investors all around the world. The newly appointed ambassador for Brazil in Montenegro, Alesandro Ador Neto, has expressed a positive interest in the Port of Bar as a potentially important traffic intersection that could connect Brazilian companies with Montenegro. Ambassador Ador Neto has visited the Port of Bar and stated that it could play a very important role in strengthening relations between the two countries. Being one of the biggest economies in the world, as well as one of the fast growing economies, a good relationship with Brazil would represent a positive trend in the continually rising Montenegrin economy.
Subsidies Loan for Agriculture The Montenegrin Minister of Agriculture and Rural Development, Tarzan Milosevic, has stated that the ministry should put into motion an initiative that would ensure the subsidy of interest on bank loans to companies. Support for purchasing certain agricultural products, as well as projects that are supported through MIDAS would be the subject of such subsidies.
Tenders Invitation to Tender for Long – Term Lease of Tourism Complex “Valdanos” Ulcinj The Government of Montenegro, the Privatization Council and the Capital Investment Council have opened a tender for bids to local and international investors for the long – term lease of the tourist resort “Valdanos” in Ulcinj. Bids will be received from investors that have proven financial standing and a track record in design, construction and the management of complex tourist facilities. The length of the lease is 30 years, with the possibility of a lease extension. Some of the conditions set out for bidders include the following: they have to already be an international hotel operator; they have to be a well known brand; they have to have five years of continuous experience in the design, development and management of 4+ or higher level hotels. The Valdanos cove is situated 4 km southwest of Ulcinj, and represents one of the most beautiful natural resorts in Montenegro. Its area is approximately 346 ha and it is covered by numerous olive trees. The bids are to be delivered by September 19, 2011.
Invitation to Tender for 63.5273% Share of the Capital and for a Long Term Lease of 90 Years, for a Land Currently Owned by the Hotel and Tourism Company HTP “Ulcinjska Rivijera” AD A public invitation to participate in the above tender was announced by the Government of Montenegro for the privatization of the company “Ulcinjska Rivijera” AD, along with the offer of a long – term lease of the land complex of the same company. The privatization will involve selling the government’s share of “Ulcinjska Rivijera” AD which is worth 63.5273% of the total capital of the company, and is represented by 968,402 ordinary shares. The second part of the tender refers to the long – term lease of the land owned by the state of Montenegro. For further information, interested investors can find more details in the tender documents. The core business of “Ulcinjska Rivijera” AD comprises: hotels, motels and restaurants, and interested investors should have a background in this sector. The deadline for submission of the bids is September 19, 2011.
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