Almost all KfW partner countries in the region are planning or already preparing to join the EU, and this is creating a profound change. However, in order to meet EU standards, reforms and investments in infrastructure are still needed.
The Russian war against Ukraine is causing human suffering, displacement and destruction of infrastructure and basic services. KfW is supporting Ukraine in meeting its most urgent needs and in pursuing long-term goals with a view to EU integration. This includes repairing, restoring and modernising the energy and water supply, providing housing for internally displaced citizens, financing and safeguarding small and medium-sized enterprises, and protecting natural habitats.
The war is also affecting neighbouring Moldova, which is hosting many Ukrainian refugees. Moldova is being affected by trade and energy supply restrictions. On behalf of the German Federal Government, KfW is supporting this country via UNICEF in the areas of sustainable urban development, energy and energy efficiency, sustainable economic development and accommodating refugees.
Through KfW, Germany is supporting Armenia in the areas of sustainable economic development, promotion of renewable energy sources and electricity transmission, sustainable urban development and biodiversity, including through the Caucasus Nature Fund (CNF), which was launched in 2007 to support protected areas in the Caucasus.
On behalf of the German Federal Government, KfW is also supporting areas in Georgia protected by the CNF as well as promoting sustainable forestry practices. In addition, on behalf of the German Federal Government, KfW is providing investments for efficient electricity generation and distribution, promoting renewable energy sources and energy efficiency, and is playing an active role in creating sustainable improvements in municipal infrastructure and in modernising the vocational education system.
The six western Balkan countries are part of the Berlin Process, which is intended to strengthen regional stability, stimulate economic growth and help foster reconciliation among people groups. Furthermore, Germany has entered into a regional green and sustainable development partnership with the western Balkan countries and is helping them reach the EU’s climate targets as well as the Paris Agreement's 1.5-degree target. The implementation of a green agenda will pave the way for decarbonisation, greater energy self-sufficiency and a just transition. Within the framework of these agreements, KfW is supporting the western Balkan countries in complying with the requirements laid out within them.
On behalf of the German Federal Government, KfW is providing EUR 1.5 billion for the regional green and sustainable development partnership with the western Balkan countries alone. This will mainly be spent on promoting renewable energy sources and making buildings more energy efficient. It will also help to modernise and expand infrastructure, including sustainable urban development with improved drinking water supply and waste water disposal as well as modern waste management systems.
KfW is additionally one of the largest implementers of the EU’s migration pact with Türkiye. With funds from the German Federal Government and the EU, it is primarily supporting the building of schools, vocational training, youth facilities and employment promotion.
In total, KfW Development Bank committed around EUR 1.7 billion for the region in 2023.
