Tirana, Albania – On November 21, 2025, the Minister of Finance Mr. Petrit Malaj and the Director of KfW Albania Ms. Mara Drochner signed the loan and grant agreements for the second phase of the Water Sector Performance and Investment Program (WPIP II) at the amount of EUR 50 million.
With a total volume of EUR 145.7 million, WPIP is largest financing initiative of the Albanian Government in Albania’s water sector, supported by the German Government (through KfW), by the European Union, and by the Swiss Government through the State Secretariat for Economic Affairs (SECO). It is an example of team Europe pooling of funds together as additional grants from the EU are foreseen for this project as well.
WPIP II aims to bring systemic impact, ensuring a reliable and hygienically safe water supply at cost-covering and socially acceptable tariffs, improving financial performance of water utilities at the local level and strengthening of framework conditions at sector level. The program will contribute to the improvement of the quality of life of the people for half the urban population in Albania as well as to the environmental protection by reducing the discharge of untreated wastewater into the rivers and sea. It therefore supports Albania’s alignment with European Union environmental standards, particularly the EU Water Framework and Urban Wastewater Treatment Directives, marking an important step in the country’s path toward EU integration.
WPIP II will build upon the structures of WPIP I, currently in implementation in Elbasan, Fier, Berat, Lezha, Shkodra and Vlora, based on the prioritization of the Master Plan and following a performance-based approach. With this new financing, additional investment measures, based on the prioritization of the water and sanitation master plan, will be undertaken in the project locations Saranda, Lezha and Shkodra.
Background Information
In Albania, KfW finances the German Financial Cooperation through various projects and programmes. 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 1.6 billion EUR for development projects and programs. The Sustainable Urban Development is a priority area within the scope of German Financial Cooperation with Albania, with an active portfolio of over EUR 380 million.
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