World Bank grants Albania $425m in loans

TIRANA, July 15 – The World Bank says it has approved loans worth $425 million (euro331 million) to Albania to help economic growth from 2011 through 2014.
The World Bank Group’s Board of Directors discussed last week a new Country Partnership Strategy (CPS) for Albania, which provides the framework for the World Bank Group’s assistance to Albania for 2011-2014. The new Strategy is fully aligned with Albania’s National Strategy for Development and Integration and is grounded on a broad and continuous dialogue with the Albanian government and consultations with all development partners. The new World Bank-International Finance Corporation (IFC) joint CPS envisages financing up to $275 million from the International Bank for Reconstruction and Development (IBRD) and up to $120-150 million from the IFC over the four-year period.
“Albania is a development success story in many respects, having made remarkable strides in economic and social development over the past decade,” said Jane Armitage, World Bank Country Director and Regional Coordinator for Southeast Europe. “However, like many of its neighbors, Albania now faces a more difficult external environment following the global financial crisis. The World Bank Group has had a long and productive partnership with Albania, and we look forward to continuing our support to help Albania to maintain its strong track record of growth, sound economic management and poverty reduction.”
Armitage emphasized that, “The new Country Partnership Strategy aims to support a recovery in Albania’s growth rates through improving competitiveness, while also improving education and health services and strengthening the safety net. In addition, the Strategy will assist Albania to meet the new challenge of climate change, through improving water conservation and management and increasing disaster preparedness.”
According to the World Bank, over the past decade, Albania has been one of the fastest-growing countries in Europe, with average annual growth rates of 6 percent, accompanied by rapid reductions in poverty. Albania is one of a very few countries in Europe to maintain positive growth rates and financial stability in 2009 during the throes of the global financial and economic crisis. Going forward, Albania, in particular, faces a number of important challenges on account of the slower recovery in Europe and the uncertainties facing the Greek economy, a major economic partner.
“Building on the previous successful cooperation of IBRD-IFC joint interventions in critical sectors, such as energy, the IBRD and IFC have cooperated since the inception of this Strategy for a programmatic approach, with a focus on important sectors for the sustainable development of the country, including energy, roads, water supply, and waste management sectors, as well as improving the business environment,” said George Konda, Principal Economist in the Southern Europe and Central Asia Department of the International Finance Corporation (IFC).
The new Strategy will support Albania’s development and help with key challenges, such as consolidating its fiscal position to be able to weather the coming years; further improving the efficiency of public spending while addressing the still large infrastructure needs; improving the implementation of regulatory and institutional reforms to boost competitiveness and investment; raising education levels and skills to meet the demand from businesses; and strengthening social safety nets and key health services to ensure that the poor are protected from economic fluctuations.
In addition, Albania is among the European countries most vulnerable to climate change, and needs to better manage its water resources and usage to changing climatic conditions.
Albania became a member of the World Bank in 1991. Since then, 68 projects totaling US$1.4 billion have been supported by IDA and IBRD, and 10 projects totaling US$185 million by IFC. Currently in Albania there are 15 active projects in social sector, health, education, natural resources, water and energy, municipal infrastructure, and public sector management that are helping Albania to achieve sustainable economic and social development and pave the way for European integration.