Podgorica is the capital and largest city of Montenegro with an estimated population of 200,000. It is also the administrative, financial, telecommunications and university center of the country with a strong economic base focusing on the aluminum, construction and tourism sectors. The municipal annual budget for 2010 was approximately $110 million.

The total investment program of the City of Podogrica for 2011 amounts to approximately $56 million. The total estimated cost of completion of the Eastern Bypass is approximately $20.5 million.

13.22 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	13.22
Equity

* These investment figures are indicative

The project is located in the Municipality of Podgorica, Montenegro.

The proposed IFC investment will support private sector development in Montenegro through reduced travel time, enhanced mobility and facilitating country's reintegration into international trade and tourism networks. It will also have long-term environmental and social benefits by reducing air pollution and traffic accidents in the City.

IFC will play a catalytic role mobilizing long-term commercial financing that will allow the Municipality of Podgorica to complete a high priority project for the Balkans region.

During the works to date the Municipality has shown that it is able to manage Bypass-related social, environmental, health and safety performance in compliance with EU requirements and national laws. Issues of potential concern during the project implementation include economic displacement of approximately 94 households and 20 businesses, and physical displacement (relocation) of three households, much of which has already been successfully completed, and related community engagement and disclosure of information. IFC’s E&S due diligence suggests that the process to date has been conducted according to national legal requirements and in keeping with key IFC requirements; to date no significant adverse social impacts have been identified. Other potential adverse impacts are construction related environmental, health and safety aspects, emergency response planning and rehabilitation arrangements post construction, which IFC''s due diligence suggests are limited and site-specific, largely reversible and can be readily addressed through mitigation measures. This is therefore a Category B project according to IFC’s Policy on Social and Environmental Sustainability.

A summary of IFC’s environmental and social review findings for the project including the rationale for the B categorization is publicly available in the Environmental and Social Review Summary (ESRS) disclosed through IFC’s external website (http://www.ifc.org/projects).