Prime Minister Sali Berisha who accompanied Niebel in project inaugurations, thanked Germany for the precious support of more than 1 billion euros for Albania during the past 20 years, especially in the energy and water supply and sewerage fields
TIRANA, August 8 – Energy, water supply and sewerage, infrastructure, environment, vocational training education and SMEs will continue to remain the focus of the German government’s support to Albania. This was reconfirmed last weekend during a three-day visit German Federal Minister for Economic Cooperation and Development Dirk Niebel paid to Albania where he met the country highest officials and participated at the inauguration ceremony of several German government-funded projects.
Speaking at the inauguration ceremony of a 400 kw transmission line between Albania and Montengro, Niebel said “Germany supports Albania in its efforts for regional integration in the energy sector. The transmission line between Albania and Montenegro is only the beginning. It will make power supply in both countries more reliable and efficient. Albania will be connected to the European electricity market, which will contribute to further economic development in Albania. In May, I took part in the launching ceremony for a 400 kilovolt transmission line between Albania and Kosovo. And a transmission line between Albania and Macedonia is currently under preparation.”
According to the Albanian government, the 155-km Tirane-Podgorice transmission line, worth Euro 43 million, will increase Albania’s capacities to exchange energy with regional countries.
Prime Minister Sali Berisha, who accompanied Niebel in project inaugurations, thanked Germany for the precious support of more than 1 billion euros for Albania during the past 20 years, especially in the energy and water supply and sewerage fields “which have been key for the country’s development.”
The German Minister also joined Albanian government representatives in the ceremony laying the foundation for improved drinking water supply and wastewater disposal systems in the northern city of Shkodra. Dirk Niebel said “the cooperation of several donors with Albania on this project has been exemplary. Germany is involved in a joint effort with Austria and Switzerland to make available funding to improve people’s drinking water supply and to enhance, beyond national borders, water protection at Shkodra Lake.”
“In Albania, reliable power supply cannot be taken for granted. And in many cities and in rural areas, round-the-clock water supply or environmentally sound wastewater disposal are not a reality either. For example, for 25 per cent of the population the drinking water supply is limited to less than eight hours a day. Germany’s support for Albania focuses on improving the power and water infrastructure and on fostering sustainable economic development,” says the Federal Ministry for Economic Cooperation and Development.
The German minister concluded his visit in the UNESCO World Heritage town of Berat where he inaugurated the Berat-Kucove water supply system part of the project ” Water supply for central Albania” financed by the German government through KfW.
Minister Niebel’s programme also included visits to development cooperation projects being implemented with German support, such as the international “Mother Teresa” airport in Tirana, which has been extended with the help of a Public Private Partnership (PPP) to serve 1.5 million passengers. The airport is now one of the fastest growing in Europe.
“Private sector activity will be the prime engine that drives further development in Albania. That is why, for example, we are helping to enhance the general economic conditions in Albania. Therefore I am very pleased that Germany’s private sector is making a growing contribution to promoting dynamic development here,” Dirk Niebel underlined.
Call for dialogue to overcome political stalemate
Speaking of the country’s political stalemate which has been going on since the June 2009 general elections, the German minister urged self-initiative and dialogue among Albanian politicians to meet Copenhagen criteria for EU membership.
“I would ask all parties to work towards peaceful and democratic development in Albania and to resume their talks with each other again. Germany is providing support to the country of Albania, not to one or the other of its political parties.”
Dirk Niebel added “Albania has undergone an impressive change in the last 20 years, which is why development cooperation with this country is challenging. Germany is supporting Albania in its preparations for possible membership of the European Union. Whilst we are providing a considerable level of support to Albania, we also expect a considerable amount of self-initiative from Albania. That is especially so as far as fulfilling the Copenhagen criteria are concerned – criteria that need to be fulfilled to become eligible for EU member-ship. These include a democratic order based on the rule of law, respect for human and civil rights, the elimination of corruption and a functioning market economy.”
German investments in Albania
Since the early 90s when the country’s communist regime collapsed and relations between the Germany and Albania were reestablished, the Federal Republic’s financial assistance and German private investments have been on the rise.
The Tirana International Airport, run by the Hochtief Airport GmbH, the chief partner in a consortium that rehabilitated and now operates the country’s only international airport at Rinas, is Germany’s biggest investment in Albania.
The German-Albanian Chamber of Commerce and Industry in Albania, DIHA, which represents the interests of German companies in Albania and promotes German-Albanian economic cooperation, says that German interests in Albania’s logistics and infrastructure also include maritime transport and energy.
A German-Albanian consortium, the Albanian Stevedoring Company (ASC), currently handles the cargo in the country’s biggest port of Durres using modern technology. The KfW Entwicklungsbank is also engaged in the funding of big infrastructural projects, mainly water supply and sewerage ones, as well as energy, financing regional interconnection lines linking Albania to Montenegro, Macedonia and Kosovo.
German-owned ProCredit bank also plays an important role, offering loans to SMEs and most recently to renewable energy projects.
German companies in Albania are also actively engaged in other important sectors such as construction, production and retail sales.
Praktiker Group, one of the leading Do It Yourself chain operators in Europe, has also been operating in Tirana since the end 2009. Rofix, which produces construction materials and Profarma pharmaceutical companies which has been acquired by a German consortium, are some other successful German-run companies in Albania.
Trade exchanges with Germany
Latest INSTAT data show Albanian exports to Germany during the first half of this year climbed to 2.6 billion lek (18.5 million euros), up from around 2.1 billion lek during the same period last year. Germany was Albania’s second most important partner for the export of garment and footwear products with around 2 billion lek or 6 percent of total exports of these products, which are Albania’s top exports.
Meanwhile, imports from Germany during the first half of this year slightly increased to 13.2 billion lek (94 million euros), accounting for 5 percent of Albania’s total imports.
Implementation of laws, biggest obstacle for German investors
Despite significant progress made in legislation in recent years and the favourable business climate, German investors in Albania see a huge gap between the adopted good laws and their implementation. This is admitted by the secretary general of the German-Albanian Chamber of Commerce and Industry in Albania (DIHA), Annette Kasten, who told Deutsche Welle in the local Albanian service earlier this year that land ownership, bureaucratic procedures, and the need to improve legislation on SMEs are some of the main obstacles for German investors.
“Although Albania has a real estate registration office, there are many disputes on land ownership, which is bad signal for foreign investors. The Albanian government has recently approved a law to advocate foreign businesses on land ownership disputes only in case of big investments up to 10 million euros,” said Kasten, adding that bureaucracy with confirmation of employees and VAT receipts also remained an obstacle.
“There is also urgent need to improve the legal framework on small and medium-sized enterprises because they create opportunities for production and massive employment and are related to the development of agriculture and tourism, two vital sectors to attract investors and develop the country’s economy,” added the DIHA official.
However, DIHA says that a series of laws of European standards have favoured the attraction of foreign investors including German companies. “Almost all sectors of the economy are open to foreign investment, there is a 10 percent flat tax on profits and there is no limitation to buy private property,” the DIHA official tells Deutsche Welle.
Germany is currently Albania’s second most important destination for the exports of textiles and one of the country’s main trade partners. According to the German Federal Foreign Office, bilateral trade relations suffer from the small size of the Albanian market, legal uncertainty and the lack of Albanian supplies. Nevertheless, the Albanian market for German consumer and investment goods is larger than in the past thanks to an increase in purchasing power.
