The European Investment Bank (EIB), the Union's long-term financing institution, provides its first ever loan for an environment project in the Western Balkans. The EUR 27 million financing is for water infrastructure in 5 Albanian municipalities (Durrës, Korce, Lezhe & Shengjin, and Saranda).
The project concerns basic water supply, sewer network and collection systems and low-cost wastewater treatment infrastructure. Integral to the project are measures to improve the financial viability of the municipal water and sewerage companies concerned, as well as to ensure sound project implementation and subsequent management.
The project has been developed together with the Albanian Government, the local municipalities and water companies, as well as co-financiers already active in the Albanian water sector, with the aim of improving water and wastewater services in line with the Albanian Water Supply and Sanitation Strategy which addresses the structural problems faced by the sector. EIB's long-term lending, with an extended grace period and at favourable rates complements well technical assistance for capacity building, as well as concessional financing and grants provided by co-financiers the World Bank/IDA, Kreditanstalt für Wiederaufbau (KfW), the Global Environmental Fund (GEF) and Government of Luxembourg through Lux Development..
The above financiers are joining forces as this collaboration has a positive impact on the financial viability of the project in the cities involved, and environmental benefits such as improved quality of life and enhanced recreational attractiveness of the tourist areas of Saranda, Shengjin and the beach area South of Durrës.
In 2003, the European Investment Bank, the European Union's long-term financing institution, has thus far provided financing to the Western Balkans totaling just under EUR 400 million.
Having mainly supported the transportation sector since starting operations in the Western Balkans in 1999 within the framework of the Stability Pact, and having diversified its lending in the region in 2001 to provide increased support for the private sector, the EIB made in 2002 its first large private sector operation in the region in support of Foreign Direct Investment in the region. This was a EUR 25 million loan for the Lukavac Cement Factory, promoted by an Austrian company.
EIB will in the coming years remain an important source of finance for the Western Balkans Countries, in cooperation with the European Commission, the European Agency for Reconstruction, and other international donors, including the World Bank and EBRD. For 2004 EIB expects to maintain its annual lending at the same level of some EUR 400 million.
As mentioned in EIB Medium Term Strategy for Western Balkans published recently three new sectors will also increasingly receive the EIB support in the coming years: Private sector (including foreign direct investment), health and human capital resources, including innovation and R&D, as well as environment (EIB is finalising significant rehabilitation investments in infrastructure related to streets, communications and water utilities in the individual cities and municipalities in all the countries of the region).