Major Albanian projects to benefit from China’s $10 bln CEE funding.

“China is ready to play an active role in Albania’s highway, railway and port construction, promote more Chinese companies’ investment in cement plants, mining, economic parks and tourism,” says Prime Minister Li Keqiang.
TIRANA, Dec. 17 – Chinese investments in Albania and the Balkans are closer than ever as the emerging superpower has pledged $10 billion in infrastructure projects for Central and Eastern European countries.
“China is ready to play an active role in Albania’s highway, railway and port construction, promote more Chinese companies’ investment in cement plants, mining, economic parks and tourism,” China’s Prime Minister Li Keqiang told his Albanian counterpart Edi Rama at a China-CEE summit in Belgrade this week.
Prime Minister Rama said Albania welcomed China’s investment and will deepen bilateral cooperation in economy and trade, agriculture, infrastructure and education.
Chinese Prime Minister Li highlighted the traditional friendship between China and Albania which this year marked the 65th anniversary of the establishment of diplomatic ties.
“A memorandum of understanding with the Chinese Exim Bank to start work on a series of Chinese projects in Albania has been signed. The first project that will open up a new era of cooperation between China and Albania will be the Arber Highway, on which construction will start next year,” Prime Minister Edi Rama wrote on social media ahead of the summit.
“Full understanding with Prime Minister Li Keqiang so that China increases its financial support toward Albania and the region,” he added after a meeting on the sidelines of the summit.
China’s investments in the Balkans comes at a time when growth in the world’s second largest economy has slowed down and the country has plenty of liquidity.
“China’s growth has slowed down a bit. In this situation, Beijing is trying to boost its domestic economy instead of holding its capital in foreign bonds,” Milan Kovacevic, an expert for foreign investment in Belgrade tells Deutsche Welle.
Albanian Economy Minister Arben Ahmetaj says the highway linking Albania to Macedonia known as the Arber Road, an industrial park just outside Durres and the Adriatic-Ionian highway are some of the Albanian projects expected to benefit from Chinese funding.
China targets turning Greece’s port of Piraeus into a transport hub for its trade with Europe and has signed a key deal to support the construction of a high-speed bullet train between Budapest and Belgrade – a major link that would speed up the delivery of the country’s exports to continental Europe.
Arber Road, Shengjin Port
The completion of Arber road, a key segment linking Albania to Macedonia which remains hostage to around $200 million, will be the key benefitting from Chinese funding.
“Out of 45 kilometres, 25 km have already been tendered. The most difficult part is the tunnel in the midway at a high altitude. We have to find a technical solution which depends on further financing of around USD 200 million,” deputy Transport Minister Ylli Manjani has said.
In 2013, the China State Construction Engineering Corp. offered to complete the remaining section of the Arber road linking Tirana to the northeastern region of Dibra and neighbouring Macedonia under a concession deal. China’s CSCEC made an offer to complete the remaining 27 km of the Arber road including the Qaf Murriz tunnel and the Ura e Vashes bridge.
The construction of the Arber Road is expected to cut distance between Tirana to Macedonia to only 75 km, from 185 km currently.
Some 31.6 km of the Arber Road are still under construction and 25.7 km have been left without investment, including the costly Qafe Murrizi tunnel. The double bore tunnel is 2.5 km long with an elevation of 934 m.
“Dibra is one of the most underdeveloped regions in Albania. The Arb쳩 Road will connect Dibra with the rest of the country giving a much needed boost to the local economy. The road will also become a new vital route between Tirana and Macedonia thus improving considerably the infrastructure in this part of the Balkans,” says Professor Gezim Alpion of the Birmingham University who has initiated an online petition on the completion of the road.
The Albanian government is negotiating with China over a concession in the Shengjin port, which had been continuously promised to landlocked neighbouring Kosovo since 2009, one year after it declared its independence.
The Shengjin Port, Albania’s second biggest port for handling goods, is having its basin deepened under a USD 1.5 million investment by the Albanian government, says the Transport Ministry. The project expected to complete by 2015 will increase the port’s handling capacity to 1 million tonnes, up from around 300,000 tonnes of goods currently and allow anchoring of ships with a capacity of up 6,000 tonnes.
The Albanian government also plans to build a new port in Shengjin, northern Albania, that will also serve to neighbouring Kosovo and Macedonia for their trade exchanges.
Since 2011 the Shengjin Port has not been handling passengers. The Shengjin port is about 90 kilometers north of capital Tirana and about 100 kilometres west of Kosovo.
Trade exchanges rising
Having emerged as Albania’s third most important trade partner and almost overtaking Greece as the second top partner, China has reconfirmed its interest of strengthening economic cooperation with Albania especially in the agriculture and infrastructure sectors. This was also confirmed earlier this year when Prime Minister Rama visited China to attend the Summer Davos in north China’s Tianjin city.
Trade exchanges and investments from China have seen an increase in the past few years.
A consortium led by China’s biggest copper producer has recently bought a 50 percent stake in Turkey’s Nesko Metal Sanayi ve Ticaret Albanian mining operations for $65 million, registering the biggest Chinese investment in Albania. Jiangxi Copper will own a 48 percent stake in Nesko while two other Chinese companies have a 2 percent share.
The central banks of Albania and China have also signed currency swap deal worth around 250 million euros. The swap transaction provides a channel by which the central banks can have access to the local currency of the other party. It aims to promote bilateral trade and direct investments for economic development of the two countries in local currency terms, and to support domestic financial stability of both countries, if market conditions require such liquidity.
Albania-China business community is also now represented by a Chamber of Commerce and Industry.
China is one of Albania’s top trade partners with trade exchanges on a constant upward trend.
Albania’s trade exchanges with China registered a considerable increase in 2013, ranking China the third most important trade partner after Italy and Greece. INSTAT data show Albania’s exports to China double to 11.5 billion lek (Euro 80 million) in 2013 while imports slightly grew to 35 billion lek (Euro 244 million).