Germany Supports Energy Sector Reforms in Albania with EUR 100 million loan

On June 15, 2021, the Minister of Finance and Economy Ms. Anila Denaj and the Director of KfW Office Tirana Mr. Björn Thies in presence of Ambassador of the Federal Republic of Germany to Albania, Mr. Peter Zingraf, signed an agreement for the Policy Based Loan (PBL) – Support of the Energy Sector Reform in Albania – Phase I in the amount of EUR 100 million.

The programme outlines a comprehensive reform agenda in the energy sector and it is designed to contribute to the establishment of a liberalized, transparent and fair energy market in Albania. It will support Albania in implementing the country’s international commitments, especially with regard to the fulfilment of the Acquis Communautaire of the EU and the Energy community (EnC) Treaty in order to pave the way towards EU alignment and accession. The individual reforms implemented by the Albanian Governments in this context are supported together by the community of development partners working in the Energy sector.

This will contribute to create an energy market, which enables competition, stimulates private investments and strengthens Albania’s position as a regional energy hub. This will eventually lead to economic sustainability of the energy sector itself as well as of the investments into the sector infrastructure, supported by the international donor community. This policy loan is based on a joint support, together with the French Development Agency AFD that will provide additional financing for this first phase.

The signing of the loan was possible due the to the already achieved significant reform progress thanks to the dedicated efforts by all relevant Albanian institutions in the sector (Ministry of Infrastructure and Energy, ERE, KESH, OSHEE and OST). After ratification of the agreement and the final joint assessment of the reform progress, the loan will become available for disbursement. Further reform steps are already underway and further support by the German Government and AFD is envisaged. Albania is the first country in the region where this new instrument under German Financial Cooperation is applied.

In Albania, KfW implements the German Financial Cooperation and provides grant aid and concessional loans for key investments and project-related consultancy services. The German cooperation with Albania started in 1988. Since then, the German Government has committed more than one billion EUR for development projects and programs. The energy is a priority area within the scope of the German Financial Cooperation with Albania, for which the German Government has committed more than 501 million EUR since 1988.