Montenegro, Azerbaijan launch 500 mln euro resort project

Wed Mar 5, 2014 3:00pm EST

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* Project to be completed by 2016

* Should create 6,500 jobs during construction

PODGORICA, March 5 (Reuters) - Montenegro and Azerbaijan on Wednesday launched a 500 million euro ($686.97 million) project to turn a former naval base into a coastal resort, a big investment in the tiny Balkan republic.

The Kumbor base on the Adriatic coast was abandoned by the then Yugoslav navy in the early 2000s. Azerbaijan's SOCAR oil company and developer Azmont Investments want to transform it into a resort with marinas, hotels and villas, said Shahin Mustafayev, Azerbaijan's Economic Development Minister.

"Thanks to this project, investors in Azerbaijan now know that the Montenegrin government has secured a good investment climate and more projects will follow," Mustafayev told reporters.

Montenegro, with a population of only 680,000, is seeking to develop its Adriatic coast to boost growth, set to hit 3.8 percent this year.

Montenegrin Prime Minister Milo Djukanovic said the project and bilateral relations with oil and gas-rich Azerbaijan were of vital importance for Montenegro.

"Good bilateral relations paid off at the times when ... most investors were reluctant, awaiting for the global economic downturn to recede," Djukanovic said.

The resort project is scheduled to be completed by 2016. It should create 6,500 jobs during its construction and 1,200 after completion.

Montenegro's government is also seeking other investors to develop its infrastructure, mainly in the rugged mountainous region in the north. It last month signed a 800 million-euro ($1.1 billion) deal with China Road and Bridge Company (CRBC) to build a stretch of its first four-lane highway to Serbia. ($1 = 0.7278 euros) (Reporting by Petar Komnenic; Writing by Aleksandar vasovic; Editing by David Evans)

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