Albania borrows another $35 mln to complete Arab-funded Tirana-Elbasan highway

Albania borrows another $35 mln to complete Arab-funded Tirana-Elbasan highway

TIRANA, March 27 – Almost four years after its opening to traffic, the Tirana-Elbasan highway is on track to finish as the Albanian government has reached a deal with the Islamic Development Bank over a new $35 million loan to

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Albania blocks meat imports from Brazil until tests show it’s safe

Albania blocks meat imports from Brazil until tests show it’s safe

TIRANA, March 27 – Albanian food authorities say they have blocked Brazilian meat imports to the country and have taken samples to test products over their safety after some of the world’s biggest importers of Brazilian meat imposed bans. The

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World Economic Forum: Albania remains among top global energy performers

World Economic Forum: Albania remains among top global energy performers

TIRANA, March 27 – Although one of Europe’s poorest countries, Albania ranks among the top global performers when it comes to its ability to deliver secure, affordable and sustainable energy, according to a report by Switzerland-based World Economic Forum. Thanks

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New law reduces property compensation bill

New law reduces property compensation bill

TIRANA, March 23 – A new law on the compensation of the former property owners expropriated under communism is expected to considerably reduce the bill the Albanian government has been paying in the past decade, mainly resulting from decisions by

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New project okayed to produce country’s first wind energy

New project okayed to produce country’s first wind energy

TIRANA, March 23 – With the country’s domestic electricity generation wholly reliant on hydropower plants and rainfall, the Albanian government has awarded a new 25-year licence to an Albanian company to build a wind farm after several similar projects approved

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Albania suffers one of region’s highest deforestation rates, World Bank data shows

Albania suffers one of region’s highest deforestation rates, World Bank data shows

TIRANA, March 22 – Albania is one of the Balkan countries to have faced the largest deforestation rates in the past 25 years of its transition after the collapse of the country’s communist regime in the early 1990s, World Bank

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AmCham: High tax burden remains top concern as business climate recovers to 5-year high

AmCham: High tax burden remains top concern as business climate recovers to 5-year high

TIRANA, March 20 – Some of the country’s biggest local and foreign companies represented by the American Chamber of Commerce in Albania perceive the business climate to have considerably improved in 2016 but high taxes, unfair competition and government bureaucracy

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Vienna Institute warns of elections, judiciary risks as it upgrades growth forecast

Vienna Institute warns of elections, judiciary risks as it upgrades growth forecast

TIRANA, March 15 – The Vienna Institute for International Economic Studies has slightly revised upward Albania’s growth prospects for the next three years, but warns political tension ahead of next June’s general elections and failure to make progress with the

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Albanian-Greek joint ventures get 5-year contracts to maintain country’s roads

Albanian-Greek joint ventures get 5-year contracts to maintain country’s roads

TIRANA, Match 15 – Two Albanian-Greek joint ventures will maintain three quarters of the country’s roads for the next five years after winning international tenders as part of joint World Bank – Albanian government road maintenance and safety project. Albanian-owned

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Government security yields embark on downward trend

Government security yields embark on downward trend

TIRANA, March 16 – Yields on government securities have embarked on a downward trend in the past couple of months as the country’s commercial banks are using their ample liquidity to invest in risk-free 12-month T-bills and two-year notes. The

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                    [post_content] => TIRANA, March 27 - Almost four years after its opening to traffic, the Tirana-Elbasan highway is on track to finish as the Albanian government has reached a deal with the Islamic Development Bank over a new $35 million loan to complete the first 14 problematic kilometers of the highway whose progress has been halted by massive landslides and extra financing needs.

Linking the capital city to Elbasan, central Albania, the highway is considered key to boosting connectivity with southeastern Albanian region of Korça as well as neighbouring Greece and Macedonia, with a huge impact on increasing trade exchanges and tourism revenue.

The new 20-year loan the Albanian Parliament is about to approve brings the highway's total cost to about $335 in a wholly Arab-funded project that is considered the second largest infrastructure project Albania has completed in the past decade after the Durres-Kukes-Morine highway linking Albania to Kosovo completed in late 2010. The latter is set to become the country's first toll road by next year as a concessionaire has already been picked to charge average tolls of about Euro 5.

The new four-lane highway that cut travel distance between Tirana and Elbasan from a previous 48 kilometers to only 31 kilometers, has been partially operational since 2013 when a double-bore 2.5 km tunnel was built by Greece’s Aktor for $83 million.

The Albanian Road Authority says the highway is on track to finish by the end of this year unless new landslide and weather conditions make its completion impossible.

"The Tirane-Elbasan is a road project inherited with huge technical problems. The Albanian Road Authority had to complete a lot of work so that its technical council approved all detailed projects proposed by the contractor, especially regarding the main segments of Mullet, Iba, three other landslides along Iba and the segment linking the tunnel to Kerrabe," Dashamir Xhika, the head of Albania's Road Authority has told daily Panorama in an interview.

"The fund approved in the new deal will go to all landslides that have taken place in this road axis to give a final solution and guarantee the safety of this road. We expect the segment from the TEG roundabout to Ibe to finish by next spring. Currently, this segment is being paved," says Xhika.

"The whole segment will finish by the end of this year, but we have to be careful when talking about this because it's a huge and tough project with many unexpected issues that could emerge during its implementation because of the terrain but also weather conditions," he adds.

Back in 2014, massive landslides following uncontrolled explosions and difficult terrain led to the evacuation of some 30 households and caused damage to local businesses.

The highway is being completed by a joint venture between Kuwait’s Copri Construction and Greece’s Aktor.

Overwhelmingly funded by the Islamic Development Bank with $258 million and other Arab financial institutions such as the Saudi Fund for Development and the OPEC Fund for International Development, the highway has already considerably cut distance between capital Tirana and Elbasan, the third most populated region of Albania, and a hub to the southeastern Albania.
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                    [post_content] => TIRANA, March 27 - Albanian food authorities say they have blocked Brazilian meat imports to the country and have taken samples to test products over their safety after some of the world's biggest importers of Brazilian meat imposed bans.

The temporary ban comes amid concerns that consumers might be at risk as Albania imports about a quarter of its meat products, mainly chicken and poultry, from Brazil, the world's largest meat producer.

In a statement following media reports of “rotten Brazilian beef” entering the country, the National Food Authority says the country has imported no beef from Brazil during the past five months and that it has recently blocked poultry and pork from entering Albania until tests show meat is safe to consumers. The watchdog says the temporary ban has been imposed despite no notice by the European Commission's Rapid Alert System for Food and Feed.

Food authorities say Albania imports meat from Basil based on a 2006 deal between the two governments and only from plants certified to export to the EU.

China, Chile and Egypt lifted the ban on Brazil meat last weekend while the European Union, the second largest importer after China, announced it would reject produce from the plants under investigation in Brazil.

The Brazilian meat scandal was triggered by a huge police operation that found evidence of meat packers selling rotten and substandard produce for several years, in an operation severely affecting the exports Latin America's largest economy for the past couple of weeks.

Brazil's President Michel Temer says the government has decided to speed up the audit process in the 21 establishments cited in the Federal Police investigation.

"The facts are that among 11,000 employees, only 33 are being investigated into. Out of 4,837 establishments subject to federal inspection, only 21 are allegedly involved in irregularities. The objective of the investigation is not the agriculture and livestock defense system in place, whose rigor is widely recognized, but a few conduct deviations," the Brazilian president is quoted as saying in a statement sent by Brazil's embassy in Tirana.

Albania's imports meat, coffee and sugar from Brazil with imports slightly increasing to 5.7 billion lek (€41 million) in 2016, about 1.2 percent of the country's total. Meanwhile, Albania's exports to Brazil are almost non-existent, according to state statistical institute, INSTAT.
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                    [post_content] => TIRANA, March 27 - Although one of Europe's poorest countries, Albania ranks among the top global performers when it comes to its ability to deliver secure, affordable and sustainable energy, according to a report by Switzerland-based World Economic Forum.

Thanks to its large supplies of natural resources, mainly hydro-dependent electricity and huge oil and mineral production, Albania ranked 25th among 127 countries in the 2017 Global Energy Performance report, losing eight spots compared to last year when it ranked 17th outperforming all South East Europe countries.

On a 0 to 1 scale, Albania scored an average of 0.7 on economic growth and development, environment sustainability and energy access and security, measuring the extent to which energy architecture supports economic growth, the environmental impact of energy supply and consumption and the rate to which energy supply is secure accessible and diversified.

"Although the top 20 performers commonly have a high GDP per capita, an advanced economy by no means guarantees a high-performing energy sector, nor is it a prerequisite. Paraguay (22nd) and Albania (25th) are strong examples of this, with GDPs per capita in the bottom 40 percent for the cohort, yet are found in the top 20 percent of the Energy Architecture Performance Index," says the World Economic Forum report, noting that countries with large supplies of natural resources are at an advantage in being able to boost their economies and provide their populations with secure, low-cost energy, if managed well.

With the exception of Norway, Colombia and Denmark, all top 20 performers are net importers of energy, reflecting their lack of natural resource endowment.

Albania secures 100 percent of its domestically produced electricity from hydropower plants and produces huge amounts of oil and minerals, the majority of which are destined for exports.

A recent Eurostat report put Albania among Europe’s best renewable energy performers, mainly due to its wholly hydro-dependent domestic electricity generation meeting about 80 percent of the country’s needs. The rapid development of the country’s oil industry in the past decade has also turned Albania into one of Europe’s top three least dependent countries on imports of fossil fuels, according to another report by Eurostat, the European Union’s statistical office.

However, due to its long-mismanaged electricity system still facing high grid losses and lack of a proper domestic oil refining industry coupled with high tax burden on oil, the country faces the region's highest electricity and fuel prices, being a key burden for both households and businesses in a country with one of Europe's lowest GDP per capita.

 
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                    [post_content] => TIRANA, March 23 - A new law on the compensation of the former property owners expropriated under communism is expected to considerably reduce the bill the Albanian government has been paying in the past decade, mainly resulting from decisions by the European Court of Human Rights.

Last year, the Albanian government footed a record high bill of about €18 million in four cases appealed at the Strasbourg-based court, but the situation is expected to mark a turning point this year after the country's constitutional partially upheld a government law that set a new formula for the compensation of former property owners, significantly below its market value. The new law, strongly opposed by former property owners, envisages a total of about €360 million, only about a tenth to what ex-owners claim, to complete the property compensation process in the next ten years.

General State Advocate Alma Hicka had warned the previous law envisaging 100 percent compensation for property owners at market prices risked putting the country's small budget in severe difficulty with only 84 cases on trial in Strasbourg claiming compensation of €630 million, compared to about €46 million under the newly adopted formula.

The World Bank had also earlier warned Albania was the only former ex-communist country which granted unlimited compensation at market value and under its previous formula, it would take the country €30 billion, three times higher than the current annual GDP,  and 30 years to end the compensation process for the former legal owners.

However, land owners say they will continue appealing cases to the European Court of Human Rights whose decisions on alleged violations of civil and political rights set out in the European Convention of Human Rights are binding to the countries concerned.

Thousands of families in Albania were expropriated by the communists when they took power following the end of World War II and efforts of many post-communist governments to definitively resolve the property restitution and compensation issue have so far failed. The unresolved property issue has had serious financial consequences as well as social effects in Albania. Not only it holds back foreign investments due to ownership disputes, but it has also resulted in an extra financial bill because of several rulings of the European Court of Human Rights in Strasbourg in favour of families who have been expropriated.

The property situation was further complicated in 1991 just as the country's communist regime and its planned economy collapsed under the 7,501 law, portioning agriculture land on a per capita basis and not taking into account compensation of owners expropriated under the 1946 agrarian reform soon after the communists came to power.
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                    [post_date] => 2017-03-23 09:43:26
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                    [post_content] => TIRANA, March 23 - With the country's domestic electricity generation wholly reliant on hydropower plants and rainfall, the Albanian government has awarded a new 25-year licence to an Albanian company to build a wind farm after several similar projects approved in the past decade have failed to produce the first wind energy in the country. The new plant would diversify domestic electricity generation into pure renewable energy following environmental concerns over new hydropower plant permits putting at risk biodiversity and tourism in some of the country’s wild rivers which are set to be dammed up.

Albanian-owned Alb-Building company has been awarded a 25-year licence by Energy Minister Damian Gjiknuri under an unsolicited bid to build a small wind farm in Tepelena, southern Albania, at a 4.5 hectare area, according to an announcement published on the Official Gazette.

The 12 MW plant is a €13 million investment with six wind towers of up to 92 meters high that is expected to produce about 26,000 MWh/a year, says the energy ministry.

The company, which is expected to complete the project in seven months once it gets its construction permit, will have to pay an annual fee equal to 2 percent of the electricity it produces.

Back in mid-2015, an Italian company was also awarded a licence to build a 36 MW wind farm expected to produce 104,400 MWh/year with German technology employing 12 towers in the Fushe-Kuqe -Laç area, northern Albania. The €54 million investment initially expected to be completed in eight months has not been made operational yet and its fate remains unknown the same to several previous wind energy projects.

Experts say the main issue wind energy investors face in Albania is lack of long-term measurement of wind speed and having to carry out the tests on their own which considerably delays investment projects, often leading to their abandonment.

With an average of 2.400 hours of sunshine a year, the country is estimated to have annual potential solar radiation of 1,500 kWh/m2.

“Albania has untapped wind power potential, in particular along the Adriatic coast but does not have any wind power production facility yet. A number of areas with high wind energy potential with the average annual wind speed of 6-8 m/s and energy density of 250-600 W/m2 have already been identified. At least, 20 potential wind farms can be constructed in these areas,” says the Albanian Investment Development Agency in a bulletin on renewable energy in Albania.

With domestic electricity generation currently wholly reliant on hydroelectricity, Albania has large untapped wind and solar energy potential that can be cost-competitive, UAE-based International Renewable Energy Agency (IRENA) has unveiled in a recent South East Europe report.

Despite interest by several international companies, no wind or solar energy projects are currently being implemented in Albania where there is no comprehensive and supportive regulatory framework for the deployment of renewable energy sources other than hydropower yet, says the agency.

“Due to the very good solar resource and relatively satisfactory wind speeds (3.3-9.6 m/s), there is high, untapped potential for the deployment of solar PV (up to 1.9 GW) and wind (987-2 153 MW),” the same report says.

With few projects underway, the government’s target to generate 5 percent of total electricity from wind sources by 2020 seems difficult to be met.

 

 
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                    [post_date] => 2017-03-22 17:42:05
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                    [post_content] => TIRANA, March 22 - Albania is one of the Balkan countries to have faced the largest deforestation rates in the past 25 years of its transition after the collapse of the country's communist regime in the early 1990s, World Bank data shows.

The country is estimated to have lost 170 km2 of forests since 1990 with its 2015 forest area at 7,715 km2, at about a quarter of the country's surface area. The huge losses rank Albania almost worse compared to other regional countries that have gained new forest areas in the past 25 years, except for Bosnia and Herzegovina which lost 250 km2 of woods.

The situation is alarming as Albania's forest area is smaller even compared to smaller countries such as neighboring Montenegro and Macedonia. Deforestation in Albania has been mainly a result of massive illegal logging for firewood and intentional burning to open up new pastures for sheep and cattle with a negative impact on the environment and the economy, often causing massive flooding due to soil erosion.

To curb the phenomenon, back in early 2016, the Albanian Parliament approved a ten-year moratorium on wood-cutting in the country. The ban is valid for industry or export purposes, whereas logging for heating purposes was allowed albeit under the supervision of local authorities.

Despite the ban being in force for about a year, illegal logging in remote areas is reported to continue although at a slower pace. The logging ban has triggered a hike in prices of firewood, massively used for warming in rural areas, and has led to an increase in imports for the country’s wood processing industry.

In addition to resulting in significant habitat and biodiversity loss, deforestation is also considered as an exacerbating factor in the recent string of floods that the country has faced as a result of massive soil erosion, claiming lives and causing hundreds of millions of euros in damage.

“In recent decades, flooding has worsened as a result of deforestation, overgrazing and erosion, combined with a lack of maintenance of drainage canals and pumping stations,” says the UN Food and Agriculture Organization, FAO.

In addition to the human factor, FAO has warned Albania’s vast and valuable forests, which cover more than one a third of the country’s territory, are also under threat from the rapid spread of the pine processionary moth. The pest has damaged 75 percent of the nation’s European black pines, a native tree that makes up 25 percent of Albania’s high forests.
                    [post_title] => Albania suffers one of region’s highest deforestation rates, World Bank data shows
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                    [post_date] => 2017-03-20 14:33:26
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                    [post_content] => TIRANA, March 20 – Some of the country’s biggest local and foreign companies represented by the American Chamber of Commerce in Albania perceive the business climate to have considerably improved in 2016 but high taxes, unfair competition and government bureaucracy remained the top three concerns for the second year in a row.

Once again the high level of taxes tops the list of concerns as Albania’s tax burden has climbed to one of the region’s highest in the past few years, with the economy losing its competitiveness to neighbouring countries applying flat tax regimes of about 10 percent.

Since 2014, when Albania abandoned its 10 percent flat tax regime, the corporate income tax and the withholding tax on dividends, rents and capital gains have increased by 5 percent to 15 percent, making the tax burden in the country one of the region’s highest.

Albania climbed 32 steps to rank 58th among 190 global economies in the latest Doing Business report to record its best ever ranking, but yet lagged behind some of its key regional competitors offering lower taxes and easier procedures. At 36.5 percent of profit, Albania’s total tax rate is slightly lower only compared to Serbia’s 39.7 percent, the largest economy among the six EU aspirant Western Balkans countries.

On a 0 to 100 scale, Albania’s business climate measured by the AmCham hit a five year-high of 43.78 last year and is expected to further improve in 2017 as relations with tax authorities, the performance of the economy, the business climate and corruption levels were perceived to have improved in 2016 when the country’s economy is estimated to have picked up to 3.2 percent boosted by some major energy-related investment and a recovery in consumption. However, 44.4 percent of AmCham members continued to view the business climate in Albania in 2016 as unfavorable, or very unfavorable.

The confidence boost comes after the AmCham index measuring the country’s business environment hit a four-year low of 37.94 in 2015 as the government undertook a rather aggressive campaign on tax evasion and approved a sharp hike in penalties, later turned down by the country’s Constitutional Court as disproportionate to income and offences committed.

Only a third of the surveyed businesses said demand for their goods and services both in Albania and abroad improved and increased staff and investment in 2016 when domestic consumption slightly improved but the poorly diversified exports relying on garment and footwear and oil and minerals continued suffering due to a slump in commodity prices.

Finding local qualified staff emerged as the top fourth concern for Albanian and foreign businesses in 2016 while the high level of informality dropped to the fifth most problematic issue for doing business despite a late 2015 nationwide campaign formalizing thousands of businesses previously operating informally.

“Finding local qualified staff in 2016 remained difficult, or very difficult for most of the responding companies (67.5 percent) causing a decline of this indicator for the third consecutive year," the survey showed.

Once among the top concerns for doing businesses in the country due to frequent power cuts, energy supply is now rated as the least problematic issue in a top 20 list as the country’s state-run electricity sector has stabilized after the electricity distribution operator was taken back under state administration in mid-2014 following a failed privatization and a nationwide campaign was launched later that year to collected hundreds of millions of euros in accumulated unpaid bills and cut off illegal grid connections.

Relations with ministries, local government authorities and customs authorities as well as public order and safety were also perceived better in 2016.

Reducing taxes, settling the long-standing property title issue, increasing transparency in public procurement, lifting reference prices in customs offices and the implementation of a judiciary reform were among the top concerns in comments made by the surveyed businesses.

"Because of monopoly, unfair competition and less favorable business environment compared to the region we have lost business from international investors," a business representative is quoted as saying on condition of anonymity.

"Review taxes immediately to match the region in order to encourage consumption and foreign investment," says another respondent.

In his foreword to the report, U.S. Ambassador to Albania Donald Lu says improving the business climate is key to creating new jobs, triggering economic growth and opening up new opportunities. The ambassador says the implementation of the long-awaited justice reform approved in consensus in mid-2016 will increase both consumer and business confidence.

"I believe that judicial reform, once implemented, will provide additional confidence to investors that their commercial interests will be protected, pushing the ABI [business index] to higher levels in the years ahead," said Lu.

The AmCham business index published annually by one of the country’s most active associations in defending business interests, measures key elements such as government policy, the level of taxes, corruption, informality, law enforcement, but also perceptions about the overall performance of businesses and the Albanian economy.

Some 142 companies including Albanian and foreign owned ones as well as joint ventures, participated in the survey conducted in January 2017.

Earlier this year, a survey conducted by the Foreign Investors Association of Albania, FIAA, showed two-thirds of businesses in Albania consider the business climate unfavourable with courts, corruption and frequent changes in legislation and tax procedures as the top concerns.

The Albanian economy is expected to pick up to 3.8 percent this year boosted by some major energy-related investments such as the Trans Adriatic Pipeline, some major hydropower plants and a recovery in commodity prices increasing oil and mineral prices. However, a political deadlock ahead of next June’s general elections and failure to implement a long-awaited justice reform that is expected to overhaul the highly perceived corrupt judiciary are considered key to improving the business environment in one of the region’s most attractive FDI destinations in the past few years.

 

 
                    [post_title] => AmCham: High tax burden remains top concern as business climate recovers to 5-year high
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                    [post_content] => TIRANA, March 15 - The Vienna Institute for International Economic Studies has slightly revised upward Albania's growth prospects for the next three years, but warns political tension ahead of next June's general elections and failure to make progress with the judicial reform could have a negative impact.

In its new Spring forecast, the Vienna Institute, one of the top centers for research in Central, East and Southeast Europe, expects the Albanian economy to grow at above 3.6 percent in the medium-term driven by foreign investment and a recovery in oil and mineral exports as commodity prices pick up, but also positive signs from the emerging tourism industry.

"The economy will continue to grow at above 3.6 percent in the medium term. Investment-driven economic growth will be supported by international capital inflows. A recovery in external demand is expected, in reaction to higher international oil prices and positive signs for the tourism industry," says the Vienna Institute, hinting major energy-related investment already underway such as the Trans Adriatic Pipeline bringing Caspian gas to Europe and a new big hydropower plant by Norway's Statkraft as part of its Devoll HPP project.

The Vienna Institute also warns of risks related to the upcoming general elections at a time when the country has been going through a political deadlock during the past month with the main opposition Democratic Party staging an indefinite protest in a tent set up in front of the Prime Minister's office since Feb. 18 when they staged a rally over free and fair elections and decided to boycott Parliament, calling for a caretaker government to handle elections. Progress in the long-awaited justice reform approved in consensus in mid-2016 has also stalled with failure to establish the vetting bodies that will scan all judges and prosecutors for their independence from the influence of the organized crime, corruption and political power. The implementation of the reform has been set as one of the key conditions for opening Albania's accession negotiations with the EU and is estimated key to boosting confidence among foreign investors worried over rule of law in the country.

“The parliamentary elections due in mid-June 2017 have been preceded by political tension, which has jeopardised their fairness, as well as the progress made in the judicial reform initiated last year," says the Vienna Institute.

The Vienna think tank expects Albania’s growth to pick up to 3.5 percent in 2017 and accelerate to about 4 percent in 2018-2019, in forecasts which are 0.2 to 0.3 percent lower compared to the Albanian government's more optimistic forecasts.

The report shows Albania's expected growth in the next three years is among the highest in the six EU aspirant Western Balkans countries. Growth projections for the next three years in other regional Western Balkans EU aspirants such as Serbia, Macedonia, Montenegro, Kosovo and Bosnia and Herzegovina range between 2.8 to 3.8 percent.

The Albanian economy has been growing between 1 to 3 percent since 2009 compared to a pre-crisis decade of 6 percent annually.

The Vienna Institute also warns of uncertainties linked to developments in the EU and the U.S. and to a lesser extent in Russia and Turkey over the region's EU integration and security.

“The ongoing economic turnaround in the Western Balkans could fall victim to misgivings about the stability of the ‘EU carrot’ and the ‘U.S. stick’ that have ensured broad-based stability in the past two decades," says the report.

The Institute also expects Albania's inflation rate to pick up to the Albanian central's bank 3 percent target by the end of 2019 and unemployment to drop to 14 percent.

The gap in the current account, a key indicator of a country’s economic health, is also expected to slightly narrow to about 10.7 percent of the GDP.
                    [post_title] => Vienna Institute warns of elections, judiciary risks as it upgrades growth forecast 
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                    [post_content] => TIRANA, Match 15 - Two Albanian-Greek joint ventures will maintain three quarters of the country's roads for the next five years after winning international tenders as part of joint World Bank - Albanian government road maintenance and safety project.

Albanian-owned Geci and Salillari construction companies and their Greek partners have won maintenance contracts to maintain central, northern and southern roads while a Saudi Arabia-based company was announced the winning bidder to maintain southeastern roads.

Geci ltd, which also runs one of the eldest hotels in Tirana, and its joint venture Greece-based Bioliap A.T.E.V.E won the right to maintain roads in the northern Shkoder and Kukes regions for the next five years for €21.2 million, according to the World Bank. The contract excludes the segment of the Highway of Nation in Kukes linking Albania to Kosovo which set to become a toll road next year under a 30-year concession contract awarded to a United Arab Emirates-Albanian consortium in September 2016.

The same Albanian-Greek joint venture will also maintain roads in the Tirana and Dibra regions for €19.2 million.

Another Albanian-Greek joint venture made up of Albania-owned Salillari construction company, one of the country's biggest and its Greek partner Elika ATEE will maintain roads in the southern Vlora and Gjirokastra regions for €16.5 mln.

Greek construction companies have also been previously been involved in major Albania road projects, including Greece's Aktor building a 2.3 km tunnel, part of the Tirana-Elbasan highway launched in 2011, but whose first 13 km have not been completed yet due to massive landslides in construction works.

Neighboring Greece is Albania's traditional second largest trading partner and despite its worst ever recession period since 2008, it has maintained its top foreign investor position in Albania.

Saudi-Arabia-based Rawafed Al-Torok Contracting Establishment has been announced the winner bidders maintain roads the Elbasan, Fier and Korça regions in central, southwestern and southeastern Albania, for €13.5 mln.

The new World Bank-Albanian government project cuts the number of maintenance contracts to only four, down from more than 90 currently, in a bid to discipline road maintenance and cut the road accident death toll, currently one of the region's highest claiming about 295 lives a year with a rate of 9 deaths per 100,000 residents.

The project that will maintain some 1,334 km of Albania's national roads for the next five years has a total cost of €128 million, of which $80 million has been provided by the World Bank in a soft loan and the remaining part is being co-financed by the Albanian government.

The World Bank says the project targets maintaining the condition and improving the safety of the primary road and primary-secondary road networks, and strengthen sustainable and efficient road asset management and safety practices, for the benefit of road users.

“The project will improve the safety of about 1,334 km of Albania’s high volume National Roads. Road users all over the country are expected to benefit from improvements in road maintenance through less travel times and vehicle operating costs, as well as reduced social and economic costs associated with road accidents,” Artan Guxho, a World Bank Senior Infrastructure Engineer and Project Leader has earlier said.
                    [post_title] => Albanian-Greek joint ventures get 5-year contracts to maintain country's roads
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                    [post_content] => 3D business decline graphTIRANA, March 16 - Yields on government securities have embarked on a downward trend in the past couple of months as the country's commercial banks are using their ample liquidity to invest in risk-free 12-month T-bills and two-year notes. The recent trend in this year's auctions comes as lending is struggling to recover to positive growth rates and the 16 overwhelmingly foreign-owned banks continue to apply tight lending standards due to non-performing loans at about 20 percent and amid poor demand for new loans by both businesses and households.

The recent trend also comes as the country's central bank has been holding its key rate at a historic low of 1.25 percent since May 2016 in a bid to boost sluggish lending and consumption and responding to low inflation rates at about 1.7 percent below the Bank of Albania’s 3 percent target.

Yields on government securities embarked on an upward trend in the second half of 2016, reflecting higher government demand for internal borrowing. The same trend is also expected this year.

Yields on 12-month T-bills, the government’s key instrument for internal borrowing, slightly fell to 2.46 percent in the latest March 7 auction, down from 2.89 percent in the previous auction and 3.22 in late December, following a gradual upward trend after hitting a historic low of 1.24 percent in mid-2016.

Meanwhile, yields on two-year notes, the government’s key instrument for long-term debt in the domestic market, dropped to 2.63 percent in this week's auction, down from 3.35 in last February's auction and 3.8 percent in January 2017 as banks offered to purchase about double the amount the Albanian government was seeking.

Back in June 2016, yields on two-year notes dropped to a historic low of 1.5 percent as the country's central bank cut the key rate by another 0.25 percentage points to an all-time low of 1.25 percent.

Despite the slight decline in yields, investments in government securities remain a much more favourable option compared to traditional bank deposits whose average interest rates for the national currency stand below 1 percent and at almost zero for euro-denominated savings.

The lower yields have also had a key impact on reducing debt servicing as public debt dropped by 1.65 percent to 71 percent of the GDP in 2016, ending a 5-year upward trend.

With loan interest rates and security yields at a record low, the Albanian government spent only 36.2 billion lek (€264 mln) in interest rates on both domestic and external debt in 2016. The interest spending marks a record low since 2008 just before the onset of the global financial crisis when public debt stood at affordable levels of 55 percent of the GDP before embarking on an upward trend fuelled by a costly loan to build a highway linking Albania to Kosovo, rising yields and accumulated unpaid bills to the private sector.

The Albanian government targets reducing public debt to 60 percent of the GDP by 2020 but economic and political uncertainties over next June's general elections. a slower than expected economic recovery and some current and newly proposed public-private partnerships estimated to create new hidden debt make its reduction to 60 percent by 2020 a difficult target to achieve.

Yields on 12-month T-bills have more than halved in the past three years, dropping from 6.6 percent in early 2013 to 3.83 percent in January 2014 and 2 percent in early 2016, considerably reducing the cost of government’s internal borrowing.

The Bank of Albania organizes 3-month and 6-month T-bill auctions every month and 12-month T-bill auctions every two weeks. T-bills are issued and guaranteed by the Ministry of Finance on behalf of the Albanian government.
                    [post_title] => Government security yields embark on downward trend
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            [post_date] => 2017-03-27 18:31:27
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            [post_content] => TIRANA, March 27 - Almost four years after its opening to traffic, the Tirana-Elbasan highway is on track to finish as the Albanian government has reached a deal with the Islamic Development Bank over a new $35 million loan to complete the first 14 problematic kilometers of the highway whose progress has been halted by massive landslides and extra financing needs.

Linking the capital city to Elbasan, central Albania, the highway is considered key to boosting connectivity with southeastern Albanian region of Korça as well as neighbouring Greece and Macedonia, with a huge impact on increasing trade exchanges and tourism revenue.

The new 20-year loan the Albanian Parliament is about to approve brings the highway's total cost to about $335 in a wholly Arab-funded project that is considered the second largest infrastructure project Albania has completed in the past decade after the Durres-Kukes-Morine highway linking Albania to Kosovo completed in late 2010. The latter is set to become the country's first toll road by next year as a concessionaire has already been picked to charge average tolls of about Euro 5.

The new four-lane highway that cut travel distance between Tirana and Elbasan from a previous 48 kilometers to only 31 kilometers, has been partially operational since 2013 when a double-bore 2.5 km tunnel was built by Greece’s Aktor for $83 million.

The Albanian Road Authority says the highway is on track to finish by the end of this year unless new landslide and weather conditions make its completion impossible.

"The Tirane-Elbasan is a road project inherited with huge technical problems. The Albanian Road Authority had to complete a lot of work so that its technical council approved all detailed projects proposed by the contractor, especially regarding the main segments of Mullet, Iba, three other landslides along Iba and the segment linking the tunnel to Kerrabe," Dashamir Xhika, the head of Albania's Road Authority has told daily Panorama in an interview.

"The fund approved in the new deal will go to all landslides that have taken place in this road axis to give a final solution and guarantee the safety of this road. We expect the segment from the TEG roundabout to Ibe to finish by next spring. Currently, this segment is being paved," says Xhika.

"The whole segment will finish by the end of this year, but we have to be careful when talking about this because it's a huge and tough project with many unexpected issues that could emerge during its implementation because of the terrain but also weather conditions," he adds.

Back in 2014, massive landslides following uncontrolled explosions and difficult terrain led to the evacuation of some 30 households and caused damage to local businesses.

The highway is being completed by a joint venture between Kuwait’s Copri Construction and Greece’s Aktor.

Overwhelmingly funded by the Islamic Development Bank with $258 million and other Arab financial institutions such as the Saudi Fund for Development and the OPEC Fund for International Development, the highway has already considerably cut distance between capital Tirana and Elbasan, the third most populated region of Albania, and a hub to the southeastern Albania.
            [post_title] => Albania borrows another $35 mln to complete Arab-funded Tirana-Elbasan highway
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