Albania is undergoing a major transformation of its energy sector, aiming to create a more liberalized, transparent, and fair market that benefits consumers and businesses. The reform also helps Albania comply with the EU’s energy standards and regulations, as part of its path towards EU accession.
Germany and France are key partners of Albania in this reform process, providing financial and technical assistance through their development agencies KfW and AFD. Together with other international donors, they have supported Albania in developing a new pricing model, establishing Alpex (an energy market place) that fosters competition and private investment, and improving energy efficiency and distribution.
The second phase of the Policy-Based Loan (PBL) and separate agreements in support of the energy sector reform in Albania were signed on 6’th June by Deputy Prime Minister and Minister of Infrastructure and Energy Ms. Belinda Balluku, French Ambassador to Albania Ms. Elisabeth Barsacq, KfW Director for Southeast Europe and Turkey Mr. Klaus Müller and AFD Director for Western Balkans Region Mr. Dominique Hautbergue. The total loan agreements amount to EUR 100 million.
The signing ceremony was attended by State Secretary at the German Ministry for Economic Development Cooperation (BMZ) Mr. Annen, German Ambassador to Albania Peter Zingraf and other high-level officials.
The loan was made possible thanks to the significant progress achieved by Albania in implementing the energy sector reform, thanks to the dedicated efforts by all relevant institutions in the sector (Ministry of Infrastructure and Energy, Ministry of Finance and Economy, Energy Regulator Entity, Korporata Elektroenergjitike Shqiptare, Operatori i Shpërndarjes së Energjisë Elekrtike group and daughter companies, Operatori i Sistemit të Transmetimit, Albanian Power Exchange).
The loan is accompanied by technical assistance grants from the German Government (EUR 1.5 million implemented by KfW) and AFD (EUR 1.4 million implemented by Expertise France), which provide consultancy services and capacity building for the Albanian authorities.
About KfW
KfW is Germany’s state-owned development bank that finances financial cooperation projects and programmes in various sectors. KfW provides grant aid and concessional loans for key investments and project-related consultancy services. German development cooperation with Albania started in 1988. Since then, the German Government has committed more than one billion euros for financial cooperation development projects and programmes. The energy sector is a priority area within the scope of German Financial Cooperation with Albania, with an active portfolio of EUR 386 million.
About AFD
AFD Group contributes to the implementation of France’s policies for sustainable development and international solidarity. The Group includes Agence Française de Développement (AFD), which finances the public sector, NGOs, research and training; its subsidiary Proparco, which is dedicated to the private sector; and Expertise France, a technical cooperation agency. The Group finances, supports and accelerates the transitions needed for a fairer, more resilient world. AFD Group is present in the Western Balkans since 2019 and has been given a mandate to support countries in the region to meet EU standards and implement the Paris Agreement on climate change towards an inclusive and low-carbon growth trajectory. Since then, more than EUR 1.08 billion has been committed by AFD Group in the Western Balkans region, of which EUR 341 million in Albania.
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