TIRANA, Feb. 17 – A total of 1.15 billion euros was gathered on Monday during the International Donors’ Conference, held in Brussels to help Albania cope with the aftermath of the earthquake that hit the country on November 26 last year. The amount collected goes beyond the 1.08 billion damage bill, and will be distributed in the forms of direct financing, investments in housing construction or infrastructure renovations, grants, loans or development support.
The Conference was attended by several country representatives in the world, EU Member States, as well as international organisations and financial institutions. Within the EU, Italy, France and Germany were the biggest individual donors, pledging over 10 million euros in donations while Serbia pledged 2 million euros and the U.S. pledged approximately 5 million dollars, part of which will go to the U.S.-Albanian Transparency Academy. The latter will help ensure the transparent and accountable use of the allocated grants and loans in cooperation with the Albanian government.
The donor conference, organized by the European Commission, began with a presentation of the current post-earthquake situation. During his opening remarks, Prime Minister Edi Rama thanked the donors in their native languages, “from the bottom of his heart” , adding that he felt “deeply touched” by the presence of a large number of international countries and institutions participating in the conference.
The Albanian Prime Minister also thanked the European Union for the immediate assistance it provided in the aftermath of the earthquake as well as many other countries. “I am grateful for how the European Commission helped us through both of the earthquakes,” he said.
According to the damage assessment report, in addition to the 51 casualties and 900 injured, the November earthquake “displaced about 17,000 people from their damaged homes. A total of 202,291 people were affected by the natural disaster across 11 local districts and about 62,000 buildings were damaged. The evaluation report concluded that “to cope with the effects of the damage and the revenue lost as a result of the earthquake, it would take nearly 1.08 billion euros for the recovery of all sectors. The housing sector is the most in need of financing (76 percent), followed by the sectors of education and infrastructure. ” The recovery of the housing sector alone is estimated to take about 696 million euros. The total damage is equivalent to 6.4 percent of Albania’s GDP.
In addition to the pledged 15 million euros by the EU, the President of the European Commission, Ursula von der Leyen, announced that an additional 100 million Euros more from the EU budget will be donated to Albania. “It is clear that Albania alone cannot bear this burden. Today we promise the Albanian people that we will be there for a long time and our solidarity will continue to be as strong as it was in the first hours after the earthquake, ” Von der Leyen said.
“In total, the contribution of the Commission and the member states amounts to about 400 million euros,” the European Commission’s president, who appeared alongside the Albanian prime minister, said while the conference was coming to an end. The latter expressed gratitude towards the contribution, saying that “it is one of those moments when one believes and thinks something magical has happened.”
Ursula von der Leyen also commended the Western Balkans countries, who “reunited in solidarity” to help the Albanians after the earthquake, setting aside political divides. “The whole world has mobilised in your support. From Montenegro to Canada, from Turkey to Israel, from Switzerland to the United States. We have seen Serbian and Kosovar rescue teams working together for their Albanian neighbours,” she said.
As the Donors’ Conference was nearing its end, President Ilir Meta welcomed its development, expressing “deep appreciation for the solidarity and contribution of the participating and contributing countries”. On his part, Democratic Party Leader Lulzim Basha wrote that “all international donations to the Albanian people for the damage after the November 26 earthquake are blessed and welcomed. Thanks and gratitude to every country, every organization and every international institution that is staying close to the Albanian citizens in this difficult moment.”
In this line, Secretary General of the Regional Cooperation Council, Majlinda Bregu, emphasized the need to establish an Emergency Response Team specifically by the Western Balkans countries. “On behalf of the RCC, although we are not a donor organization per se – we pledge the Albanian participation fee to be considered as part of the relief fund. But in our small region, with only around 18 million people, with limited financial and human resources, we need to think about future and timely responses to natural disasters that know no borders. We have proposed to the Western Balkans to establish a its own Emergency Response and Assessment Team, as a pool of regional rapid response and assessment teams that will be deployed in case of emergency humanitarian disaster” , concluded Bregu, reiterating the RCC’s determination to take these initiatives on board, n the interests of long-term regional stability,” Bregu said.
Effect on Public Debt
Following the donor conference, the State Minister for Reconstruction, Arben Ahmetaj, explained how the 1.15 billion euros fund is being allocated to rebuild earthquake-affected areas.
Ahmetaj said that 400 million euros of the total funds will be given out as grants, while 750 million euros will be given out as soft loans. “About 400 million euros are in grants, which means that they are money that is not owed to us but donated to us. The other 750 million euros are given out as soft loans, which means there is a very low cost either in terms of financial or operational costs, so they are not commercial loans, ” Ahmetaj said.
According to Monitor, the reconstruction loan given out to Albania accounts for 5.5 percent of this year’s GDP. This loan increases the public debt-to-GDP ratio from 66.2 percent at the end of 2019, to nearly 72 percent.
State Minister Ahmetaj said that the interest rate of the soft loans will be lower than 2 percent. “Many of these loans have fixed interest rates which are below 2 percent. The Islamic Bank loan, which amounts to 365 million euros, has an interest rate of almost 1 percent, ” Ahmetaj said.
