Struggling Montenegro wants a highway. China has been happy to help.

Cain Burdeau / February 7, 2025

Montenegro (CN) — Milojko Spajić, Goldman Sachs alum and current prime minister of tiny Montenegro, is pushing ahead with the country’s controversial “highway to nowhere.” 
Short on cash and strapped for investors, the Balkan nation is leaning on China for help.
Built by Chinese contractors, the short first stretch of the A-1 highway opened in 2022. Critics promptly panned it. The controversy concerns the highway’s involvement in the Belt and Road Initiative, Beijing’s loan-for-development program. Though the A-1 project is meant to bolster Montenegro’s future, observers worry it will leave the country prey to internal corruption, enmeshed in the U.S.-China conflict, and a pariah for Western investors.
“Montenegro indebted itself in a way which was quite similar to what happened across a lot of the African countries in the context of Chinese loans,” said Jelena Džankić, a political scientist and Balkans expert at the European University Institute in Florence, Italy.
Montenegro, or Black Mountain in English, is a rugged country of isolated monasteries, fiercely independent clans and some of the world’s steepest canyons. Despite the country’s rich history, the 600,000-person nation these days is mostly known for corruption, political instability, and violent gangs.
The A-1 highway — the country’s first major public works project — was intended to turn that around. Instead, it’s deepened Montenegro’s reliance on Chinese state-run industry and brought it to the brink of bankruptcy.
Chinese funds for the project were “so-called easy money, as they understood it at the time,” said Vesko Garčević, a former Montenegro ambassador in Brussels and a European studies professor at Boston University. “All this plays into China’s interest to expand its influence.”
Dreams for this highway go back to Milo Djukanović, who ran the country for decades until 2023 through his Democratic Party of Socialists. Selling the project in 2010, he touted it as economic stimulus.
Prime Minister Spajić, who came to office in 2023, has carried on the mantle. Called the “Princess Ksenija Motorway” in honor of a historic Montenegrin princess, the motorway is envisioned as a link connecting the Serbian capital of Belgrade to the Adriatic Sea. Far from a highway to nowhere, government officials describe it as a “highway to Europe.”
Funding was always a problem. Unable to pay for the megaproject, Montenegro turned to international investors. But Western capital viewed the project as “an unprofitable and unsustainable investment,” Asmir Pućurica, a Democratic Party of Socialists official, said in an email. Meanwhile, the International Monetary Fund told the country to wait until it was in the European Union.

Then there was China. In 2013, the country launched the New Silk Road, a development program also known as the Belt and Road Initiative or BRI. Beijing was eager for a bridgehead into Europe — and Montenegro was eager for funds. In 2014, the country accepted a $944 billion, 20-year loan package from the Export-Import Bank of China with a 2% interest rate.
“The Chinese were the only ones who were willing to stand behind that project,” said Garčević, the former ambassador. “Since the government wanted this project to be done, they didn’t have many options on the table.”
The project served a variety of Chinese interests. In the aftermath of the Great Recession in 2008, China’s domestic economy was running out of work for its “national heroes,” as the country’s state-run building firms are known. China saw work opportunities abroad, and the BRI quickly became a centerpiece to its global ambitions.
“The Belt and Road Initiative is exporting one of China’s previous growth models: Investing in heavy industry and heavy industry infrastructure,” said Jiwon Baik, a China expert at Trinity College Dublin in Ireland.
There’s also a soft-power element. By offering loans and development, China could position itself as a superpower and build international relationships. All over Europe and the world, a slew of rich and poor countries have taken Chinese loans and joined the BRI. China found lots of takers in the Balkans and Eastern Europe, including Serbia, Croatia, Hungary, Romania, and Poland.
The deal was not such a stretch for formerly communist Montenegro. Even as the country has worked to join the EU, it’s deepened its involvement with China. Besides the A-1, Beijing has been busy on other projects here. Among them: a speedway along Montenegro’s touristy coast, a large wind farm, plans for a thermal power plant, and a restoration project on a towering bridge over the Tara River.
After eight long years, the first 25-mile stretch of the A-1 opened to traffic in July 2022.
Built by the China Bridge and Road Corporation, it was in many ways an engineering feat. A jaw-dropping 656-foot-high bridge spanning the Moračica River canyon lying just outside Podgorica, Montenegro’s modern capital. All along the route, workers built tunnels, toll booths, rest areas and freeway ramps.

Costs were steep. As the country’s debt load soared past 90% of its GDP in the wake of the pandemic, Montenegro announced in 2021 that it was unable to pay Chinese loans and was facing bankruptcy. European and American banks stepped in, bringing the country’s debt ratio down to 60% of GDP.
Some three years later, officials say solvency issues have been addressed. “Loan repayments have been made smoothly and within the defined deadlines,” a Ministry of Transport spokesperson said in a statement to Courthouse News. “We see no obstacles to continuing this trend.”
But there were problems too, from ecological damage and cost overruns to corruption scandals. 
Lazar Grdinić, an investigator with the watchdog group MANS, says classified documents and a secretive bidding process “created ample opportunities for corruption” — for example, by allowing politicians to hire allies. In the end, state authorities say work cost about 300 million euros ($315 million) over budget. 
On the Tara River, a UNESCO World Heritage Site known as the “Tear of Europe,” the China Bridge and Road Corporation caused significant ecological damage. The river’s natural floodplain was impacted, and fish populations have suffered, according to MANS. 
Following public outcry, China offered to restore a historic bridge over the Tara River Canyon at no cost. The Ministry of Transport says work is slated to begin in May. Still, the agency denies the pro bono work has any link to the environmental damage. Officials with the China Bridge and Road Corporation and the Bridge and Road Initiative did not respond to requests for comment for this story.
No one disputes the need for faster and safer transit in Montenegro. A train ride from Podgorica to Belgrade, a distance of only 175 miles, takes about 25 hours. Long-distance car trips in Montenegro have always been hair-raising adventures.
“During the daytime, it was maybe terrible, [but] you could tolerate it,” said Mihajlo Penič, a 39-year-old Serbian beekeeper, said of driving on Montenegrin roads. “In the nighttime, it was hell.”

It was summer, and Penič was traveling with his wife and a friend to the Adriatic Sea. It was their first time using the A-1, and they marveled at a gigantic empty rest stop as they stretched their legs.
Penič shook his head as he remembered the terror he felt on summer road trips. He had reservations about Chinese involvement but appreciated better roads. Drive times to the Adriatic used to be much longer, he said, and “almost every day there were dead people.”
Even still, Penič couldn’t shake the feeling that the Balkans should be able to fix their own roads. “Communist Yugoslavia — the big one — we were the world’s builders,” he said with a frown. “Now, we have to pay someone else.”
Nina Ilic, a 63-year-old doctor from Belgrade, also expressed mixed feelings about the highway as she took a break at the rest area with her husband. Driving through this part of Montenegro used to take a long time to navigate, she said. It made for scary driving.
The A-1 was convenient — but like many here, she was also honest about its downsides. “This road is very, very, very expensive,” she said, speaking in English. “And there’s corruption.”
Officials in Montenegro are standing behind the controversial highway. Last April, with financing from European institutions, they announced a bidding process for the next phase of construction, a 23-kilometer leg toward the border with Serbia. Work is slated to begin this year. 
According to government and media reports, the project is estimated to cost about 650 million euros ($683 million). The London-based European Bank for Reconstruction and Development has pledged 200 million euros ($208 million) in loans, while the European Commission has granted 100 million euros ($104 million). The Transport Ministry said in an email that it could not disclose interested companies, but Chinese companies are considered frontrunners in bidding.
Pućurica, the Democratic Party politician, argued that already, the A-1 has benefited Montenegro by reducing traffic accidents, increasing the flow of goods, and opening the country up to more tourism. But the highway’s tolls are prohibitively high for many Montenegrins, and data shows it isn’t getting much use.
Montenegro’s reliance on China is part of a bigger story about Beijing’s involvement in the Balkans and the rest of Europe. Over the past decade, China’s gargantuan state-run companies have been busy across the Balkans, building high-speed rail lines, freeways, power plants, major bridges, and other projects. It’s also expanding its electric vehicle production and sales into Europe through the Balkans, investing about $5 billion in infrastructure here, said Baik, the China expert at Trinity College Dublin.

Loans aren’t the only thing enticing countries like Montenegro: BRI projects are also built with cheap Chinese labor and lax environmental standards. In return, China hopes to gain not just goodwill and profits but access to natural resources like Balkan aluminum.
There’s another benefit for China: BRI contracts often include clauses allowing countries to cede assets, such as rights to a seaport, instead of cash repayments on loans. Such conditions have led many to liken the program to debt-trap diplomacy.
“It is not the fairest contract,” Baik said. “The Chinese government can gain access to crucial sites.”
The A-1 must be examined in a wider context, including concerns over China’s growing influence and how that might encumber Montenegro in the future, said Džankić, the European University Institute professor.
“Having a dependency on China, that is something that might become an issue along the way,” she said.
In the world of politics, though, she says considerations like that are too often dismissed.

“The highway looks impressive, especially the bridge,” she said. “Obviously, any politician can sell something that looks impressive as a success, regardless of whether it is or it is not.”

Courthouse News reporter Cain Burdeau is based in the European Union.

From Beijing to the Balkans: Chinese-built highway in Montenegro expands Belt and Road into Europe