Albania

Although Albania has sufficient resources of water available, at times some towns only have two hours of drinking water per day. Moreover, there is no orderly disposal of wastewater. In rural areas the situation is even more precarious because water and wastewater infrastructure is frequently dysfunctional. The same applies to waste disposal. Less than 40 % is collected and the subsequent disposal is disorganized. The majority of waste ends up on informal dump sites. On behalf of the German government, KfW is supporting the modernization of this infrastructure. Germany is currently the largest bilateral donor in this area (lead donor), and coordinates other donors.

On request of the Albanian government, KfW has supported the country in developing national master plans in the water and wastewater as well as the waste sector. These plansprioritizefuture investments. Albania thus has a tool, unique to the region, which can assess needs and help make decisions on relevant investments. On behalf of the German government, KfW invests in the modernization of water supply and the disposal of waste water and solid waste throughout the country. The programs support medium cities as well as rural areas. A key element of KfW’s support is the performance-based approach, which enables municipalities to access funds if they fulfil certain minimum criteria. Through its investments, KfW supports Albania on its way to establish EU standards.

Albania produces far more than 90% of its electricity with hydropower. The amount of precipitation has varied considerably in the past few years, so the output of the power plants is insufficient when there is not enough rain, meaning power has to be imported at high prices. As a result, Albania wants to expand its electricity grids to neighbouring countries in order to have sufficient capacity for electricity imports, but also to be able to export electricity when water reservoirs are full. Albania also aims to further increase the untapped potential of hydropower. KfW is actively working in the southeastern European country to make the still precarious energy supply more secure. Furthermore, as in the entire region, many public buildings in Albania are outdated, which results in high energy consumption and a poor degree of comfort for those using the structures. KfW supports the energy sector in several areas. It is, for instance, investing in expanding the high-voltage grids. As early as 2011, Albania was connected to the European high-voltage grid via a transmission line from Tirana to Podgorica in Montenegro. Since it was commissioned, the previous large-scale power outages have become a thing of the past. A connection between Albania and Kosovo has been completed and a third connection to Northern Macedonia is under construction. The transmission and distribution of electricity within Albania will also be modernised, thereby reducing electricity losses, improving the safety of the dams of hydropower power stations and rehabilitating public buildings for energy efficiency. For example, KfW is supporting the rehabilitation of student dormitories in Tirana, which will also reduce energy losses and improve living conditions for the students. In addition, the Albanian government and KfW are working together with the other donors in the sector to comprehensively reform the sector. Investment and sector reform will improve the general conditions for economic growth and employment and help Albania move closer to the EU.

Despite the positive development of the Albanian economy in recent years, unemployment remains high. At the same time, there is a lack of well-trained specialists. This is compounded by an ongoing exodus from rural to urban areas, which poses increasing challenges for the densely populated cities. Particularly small and medium-sized enterprises in rural areas often receive loans from banks only under difficult conditions, making it a challenge for them to invest and grow and create new jobs.

Through KfW, the German Federal Government supports the side of labour supply by strengthening vocational training and education. The focus is on practical training aligned with the needs of the labour market. As a first step, a vocational training centre near Tirana will be expanded and strengthened while at the same time options for additional investment in the vocational training system will be explored. These investments are intended to improve the training and employability of vocational students, which will improve their chances of finding well-paid work.

KfW also supports the labour demand side. For example, the rural credit guarantee fund was established with funds from the EU and the German Federal Government, enabling banks to grant more loans to small and medium-sized enterprises. The investments will create jobs and encourage employment.

Read more