bne IntelliNews -

State-owned investment fund Qatari Diar plans to launch the construction of a luxury hotel in Montenegro’s Plavi Horizonti complex, which it bought in 2014, the Montenegrin finance ministry said in a statement following a meeting between Montenegro’s finance minister, Radoje Zugic, and the fund’s executive director, Greg Bankhurst. According to information on Qatari Diar’s website, the five-star hotel will be built on 34,000 square metres (sqm) of land.

In October 2014 Qatari Diar bought several plots in Montenegro's Adriatic municipality of Tivat intended for the construction of a €350mn tourism complex, including five plots stretching over 2,356 sqm on the Przno Bay. It paid €192,000 for the land at a public auction staged by the municipality.

Back in 2010 the Qatari group also bought 300,000 sqm on the Przno Bay, this time from Tivat-based hotel operator HTP Primorje, paying almost €25mn. Shortly after, in late 2011, it launched its luxury project with the demolishing of the existing Plavi Horizonti hotel. Under the initial plans, the opening of the new complex was to take place in September 2014.

However, in late August 2014 local media reported that Qatari Diar might abandon the project and gradually cease its investments in Montenegro over unresolved land ownership issues. Following the media reports, Montenegrin officials vowed to provide Qatari Diar with the necessary environment to proceed with the planned investment, and shortly after the government adopted key decisions on land expropriation in Tivat which set the groundwork for the smooth implementation of the project. As a result, Tivat was able to launch the land plots sale in autumn 2014.

Under the initial plan, the tourism resort is designed to stretch across 24 hectares of land and include a five-star complex and residential villas.

Montenegro has said it expects the Plavi Horizonti project to absorb €80mn of investments in each of 2014, 2015 and 2016. It ranks among the country’s main investment projects, and is expected to contribute significantly to Montenegro's economic growth, employment and budget revenues in the coming years.