UNPRECEDENTED INVESTMENT OPPORTUNITIES IN MONTENEGRO

UNCLAS SECTION 01 OF 02 PODGORICA 000141 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: EINV ETRD ECON PREL RU MW SUBJECT: UNPRECEDENTED INVESTMENT OPPORTUNITIES IN MONTENEGRO PODGORICA 00000141 001.2 OF 002 ¶1. (U) Summary: Montenegro is entering the largest investment cycle in its history, a cycle that creates serious potential opportunities for U.S. and other Western investors. The GoM plans tenders totaling between 15 and 20 billion euros in infrastructure, tourism, energy, and the privatization of the remaining state-owned companies over the next two years. Eager to change the impression that only Russians are investing in Montenegro, the GOM is carrying out an aggressive "invest in Montenegro" campaign around the world. As part of this campaign, Minister for Economy Gvozdenovic will be in the U.S. this week to pitch several large projects to potential U.S. investors. End summary. ¶2. (U) The types of investments and projects, including their estimated worth (in Euros),which the GoM plans to release in the next two years are as follows (this is not an exhaustive list): Infrastructure and Energy Highways -- 3.2 billion Euros Water Supply/Waste water and Solid waste -- 150 million Euros Energy projects/5 Hydro plants and 2nd block of Thermo plant -- 2.5 billion Euros Privatizations Port of Bar -- 125 million Euros Railway (Bar - Belgrade, Niksic - Capljina, and Berane - Pec) -- 450 million Euros Airports of Montenegro (Podgorica and Tivat) -- 60 million Euros Vineyard Plantaze -- 150 million Euros Tobacco Company -- 15 million Euros Institute Simo Milosevic (a health and wellness center) -- 125 million Euro Montenegro Airlines -- 60 million Euros Greenfield investments in the tourism sector Ada Bojana -- 200 million Euros Velika Plaza -- estimated between 3 and 10 billion Euros Valdanos -- 150 million Euros Ostrvo cvijeca -- 75 million Euros Kumbor -- 90 million Euros Lustica -- 1,000 million Euros Bigova -- 40 million Euros Zabljak former Military site -- 12 million Euros Jaz -- 500 million Euros Buljarica -- 1 billion Euros ¶3. (SBU) The presidential elections dominated the GoM's schedule in March and early April, but since incumbent Filip Vujanovic's convincing victory on April 6, ministers with responsibility for the upcoming tenders have been touring the country and the globe PODGORICA 00000141 002.2 OF 002 looking for investors. Economic Development Minister Gvozdenovic and Tourism Minister Nenezic were in Dubai during the week of April 21, Minister Gvozdenovic and a team from the Ministry of Economic Development head to the U.S. for a week to promote projects in the energy sector and one very large tourism project -- Velika Plaza -- on May 5, and Minister Gvozdenovic will follow up his U.S. trip with a stop in Paris the following week. Transport Minister Lompar will promote the highway project in London at the end of May. ¶4. (SBU) Back in Podgorica, DPM Gordana Djurovic is focused on strengthening the country's overall international economic standing, most notably moving Montenegro full steam ahead into the WTO. Having reached agreement with the EU on terms of its WTO accession, the U.S. is now the main remaining bilateral partner with whom the GOM must reach an accord prior to joining the WTO. In a meeting with the Ambassador on April 29, the DPM proposed holding "technical-level" discussions to resolve remaining bilateral issues and noted that the GOM would be delighted to welcome a U.S. team to the Montenegrin coast, perhaps on the eve of the next Working Party -- which she hopes will be in July -- or earlier. She also said that Geneva or Washington would work as venues for such discussions. Djurovic said Gvozdenovic may raise this idea in his Washington meetings this week. ¶5. (SBU) Comment: By the end of May, the GoM will have approached at least six countries with in-person Ministerial-level delegations to promote investment opportunities in Montenegro. Officials have also been promoting the opportunities widely in the Montenegrin press and through local and regional conferences, such as the Vienna Economic Forum in mid April, and are working hard to strengthen Montenegro's economic standing internationally. It is clear that building on the impressive economic growth that Montenegro has seen over the last few years is a significant priority for the GoM. It is also an area in which Prime Minister Djukanovic has told us he expects to see tangible results by the end of the GoM's current mandate (Fall 2009). Central European and Russian investors are already aware of the possibilities in Montenegro, and the challenge is to spread this awareness, particularly to U.S. investors. Minister Gvozdenovic's trip to the U.S. in May will be a positive step in this direction. RMOORE