The funds will be used for projects in the fields of employment generation, education, health and, generally, for social inclusion of vulnerable groups
TIRANA, Aug. 24 – Albania and Italy have signed an agreement on debt-for-development swap for a total amount of 20 million Euro. The deal was signed last week by Finance Minister Ridvan Bode and Italian Minister to Albania Saba D’Elia.
The agreement is part of the financial assistance package provided by the Protocol of Development Cooperation 2010-2012 between Italy and Albania. It is intended to convert the debt owed by Albania to Italy into financial resources available to implement projects for social development. The instalments, which the Albanian government was supposed to pay to the Italian government to settle the previous soft loans, will be transferred into a special account at the Central Bank of Albania (the counterpart fund). The Ministry of Finance shall transfer as many instalments as to reach the total amount of 20 million Euro. Thanks to this mechanism, the Management Committee of the counterpart fund, established by the Agreement, will have the necessary financial resources to fund projects in the fields of employment generation, education, health and, generally, for social inclusion of vulnerable groups.
After the signing of the agreement, an operational manual will be drafted to provide instructions for the formulation of those projects that will be submitted to the Management Committee. This structure, composed by representatives of the Albanian Government and experts from the Italian Development Cooperation, will be in charge to select the projects to be funded under the debt for development scheme, to monitor their implementation and to assess activities and achievements.
In the field of international aid, agreements on debt for development swap are regarded as advanced financial tools, already successfully implemented by the Italian Cooperation in many other partner countries. By signing this Agreement, the Italian Cooperation is introducing in Albania this innovative operational tool, which will relieve the burden of external debt repayments for the Albanian Government and, at the same time, pool additional financial resources for social development projects considered as a priority by both sides.
INSTAT data show Italy’s remained Albania’s main trade partner with 50 percent of total exports and 30 percent of imports. More than 80 percent of footwear and garment products manufactured in Albania, which are the country’s main export, go to Italy. According to Italy’s Confindustria lobby group, some 300 Italian companies operate in Albania, mainly operating footwear and garment manufacturing.
The Italian government projects in Albania are implemented by the Italian Development Cooperation. The long-standing Italian Development Cooperation commitment for Albania reflects the deep friendship between the two countries. The Italian Cooperation is acting in a number of areas, aligning its interventions to the national and sector strategies adopted by the Albanian Government and designing them in coordination with the other donors. With a financial commitment of 300 million Euro and with more than 70 initiatives, Italy is today the first bilateral donor and overall the third after the European Union and the World Bank. The Italian Development Cooperation supports the ongoing processes of institutional strengthening and socio-economic growth and assists Albania in its path to European Union membership, as stated in the new Development Cooperation Protocol for the years 2010-12.
