The World Bank’s Board of Executive Directors has approved a €18 million loan for Montenegro to promote sustainable forest management, lower wildfire risks, and strengthen the country’s wood-processing sector. The funding is intended to help businesses in the industry grow, adopt innovation, and generate employment while also protecting one of Montenegro’s most important natural resources.
Forests cover around 60 percent of Montenegro’s land area and are considered a critical national asset. They provide income for rural communities, support biodiversity and ecosystems, and contribute significantly to climate mitigation. Despite their importance, the forest sector has not yet reached its full economic and environmental potential and is becoming increasingly vulnerable to natural hazards, particularly more frequent and intense wildfires.
According to the World Bank, the project aims to balance environmental protection with economic development by ensuring forests are managed more sustainably while also improving the competitiveness of the wood-processing industry. This is expected to create better employment opportunities and support long-term economic growth in Montenegro.
The Montenegro Forests for Shared Prosperity Project will assist the government in modernizing its forest information system, increasing value addition in the wood-processing industry, and introducing new technologies to reduce illegal logging and improve the traceability of forest products. It will also support measures to prevent wildfires and lessen their impact on forest resources.
In addition, the project will work to strengthen institutional frameworks, address policy gaps in forest industry management, and establish a sustainable system for capacity development across both forestry and wood processing. Expected results include a more competitive forest industry in European and international markets, improved forest management, better livelihoods, job creation, expanded forest coverage, and stronger carbon sequestration capacity.
