WASHINGTON, March 18, 2026 - The World Bank's Board of Executive Directors today approved a €18 million loan to Montenegro to support more sustainable forest management, reduce the risk of wildfires, and help businesses in the wood processing sector grow, innovate, and create jobs.
Forests cover approximately 60 percent of Montenegro's territory and are among the country's most valuable natural assets. They support rural incomes, protect ecosystems, and play a key role in climate mitigation. Yet the sector has not fully realized its potential and is increasingly exposed to natural hazards, including more frequent and severe wildfires.
"Montenegro's forests are vital for people's livelihoods as well as for the country's environment," said Christopher Sheldon, World Bank Country Manager for Bosnia and Herzegovina and Montenegro. "This project will help manage forests more sustainably while supporting a stronger, more competitive wood processing industry, one that can create better jobs and drive long‑term growth."
The Montenegro Forests for Shared Prosperity Project will support the government's efforts to modernize the forest information system, increase value addition in the wood‑processing industry, and introduce new technologies and systems to curb illegal logging and improve forest product traceability. It will also help prevent wildfires and reduce their impact on forest resources.
The project will also focus on strengthening institutional frameworks, addressing policy gaps in forest industry management, and introducing a sustainable system to enhance capacity development across the sector, covering both forest productivity and the wood‑processing industry. Anticipated outcomes include increased competitiveness of the forest industry in European market and beyond, modernized forest management, improved quality of life, job creation, expanded forest coverage, and enhanced carbon sequestration capacity.
