Kosovo

KfW development bank has been actively involved in Kosovo since 1999. While at that time – immediately after the war – the focus was on emergency assistance, the current cooperation focuses on the support of Kosovo to achieve the environmental standards of the EU. In the water sector, a lot has been achieved like 24 hours water supply in Pristina as well as a nationwide connection rate of above 90% of the population.

In contrast, there remain huge challenges in the wastewater sector. Prior to the start of KfW’s involvement there was no wastewater treatment at all. The construction of wastewater treatment plants in Prizren, Gjakova, Peja and perspectively in Pristina will thus be a major step forward and will enable the Kosovan partners to treat more than a third of the country’s wastewater.

The waste sector exhibits major challenges as well. The path to the fulfilment of EU standards is still long, as there is currently not a single landfill in Kosovo that meets the EU standards. Instead, wild landfills that pollute the environment and endanger public health prevail. KfW development bank has started first waste management projects and prepares further major projects in the sector.

Project information Water supply  (PDF, 169 KB, non-accessible)

The Kosovar energy sector is facing considerable challenges related to outdated facilities and inadequate maintenance. The country's rising demand for electricity has not been adequately met thus far, resulting in significant dissatisfaction among consumers. On behalf of the German Federal Government, KfW is working to eliminate supply bottlenecks and integrate Kosovo's power grid into the European electricity market.

Since 1999, KfW has committed funds totaling more than EUR 163 million to the energy sector on behalf of the German Federal Government, primarily to expand power transmission facilities and district heating but also to create a wind atlas. This makes it easier for investors to estimate the potential returns from wind energy projects. In this way, German Development Cooperation is promoting the share of renewable energy sources in the Kosovar energy matrix. (In Kosovo, renewables are reserved for the private sector).

Core problems in the area of sustainable economic development are, on the one hand, the low levels of productivity, innovative strength and competitiveness of Kosovar companies. These are the result of, among other things, the structurally limited access of MSMEs, in particular, to the formal financial sector. On the other hand, Kosovo's economy lacks well-trained skilled workers and the training and employability of young people in particular are inadequate. This results in high youth unemployment and the exodus of talented young people who don't have sufficient employment opportunities. The German FC in Kosovo therefore aims to improve the employment of the Kosovar population and to sustainably increase the productivity and competitiveness of micro, small and medium-sized enterprises (MSMEs). The measures include the promotion of sustainable, inclusive and environmentally compatible economic growth, for example by promoting access to advisory services, financing and insurance products and job creation, but also the improvement of employment opportunities for young Kosovars by strengthening the vocational training system (improving the quality of content, infrastructure and equipment), labour market services and measures to promote youth employment. In concrete terms, KfW and USAID jointly founded and capitalised the KCGF credit guarantee fund on behalf of the German Federal Government. It provides guarantees to banks for small- and medium-sized enterprises that do not have sufficient collateral to enable them to access financial services.

KCGF credit guarantee fund