MUNICIPAL INFRASTRUCTURE WORKS ON GATE TO ALPS

A multisector framework loan to finance investment schemes prioritised in the Regional Integrated Tourism and Urban Upgrading strategy to promote sustainable tourism and economic growth in the north of Albania

The project concerns an up to €50m framework loan to the Republic of Albania, acting as borrower and represented by the Ministry of Finance to support the sustainable development of the Coastline Gate of Alps area situated in northern Albania. The project is expected to support sustainable tourism and regional development by investing in basic infrastructure (wastewater treatment and water supply, pedestrian and cycling paths); natural and cultural heritage sites (protection of natural areas and historical buildings); and sustainable transport (upgrades to improve urban mobility, regional road accessibility and road safety, and public transport facilities). The promoter will be the Albanian Development Fund ("ADF"), a State led development organization, who set up an operational multi-annual programme of up to LEK 100 trillion (€872m), covering the period 2022-2028. Technical assistance is provided to ADF from EIB's Economic Resilience Initiative to identify priority investments, quantify related costs, verify alignment with EIB eligibility rules and provide initial support on Environmental Social Impact Assessment (ESIA).

This multi-sector operation supports the sustainable regional development of northern Albania through a series of integrated public investments covering transport, water and waste infrastructure, and natural and cultural heritage sites. The northern region of Albania is largely underdeveloped, with a declining population, and a heavy dependency on agriculture and small businesses.

The schemes under the operation are expected to address multiple market failures and negative externalities (e.g. pollution from untreated waste, accidents and environmental emissions from transport, insufficient private investment on tourism infrastructure), and consider climate change mitigation and adaptation. The project will help drive economic growth in the region by improving basic infrastructure and services, increasing its accessibility and attractiveness, facilitating trade and supporting businesses and investment.

The project will address several NDICI priority areas such as climate change, environmental protection, and migration-related actions.

The project is aligned with the EU's Economic and Investment Plan for the Western Balkans (2021-27) which aims to spur long-term recovery, accelerate a green and digital transition, and foster regional cooperation and convergence with the EU. The project is expected to contribute to several Sustainable Development Goals (SGGs).

The EIB loan will provide favourable financing terms complemented with technical assistance from EIB's Economic Resilience Initiative.

The Lake Shköder and the River Buna is a transnational RAMSAR site and under EU legislation, the project would fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2011/92/EU, as amended by Directive 2014/52/EU, and would therefore be subject to screening. The relevant provisions of the Habitats and Birds Directive (92/43/EEC and 2009/147/EC respectively) and Strategic Environmental Assessment (SEA) Directive 2001/42/EC also apply. In accordance with national legislation, it is expected that many of the project schemes will be subject to an EIA procedure. The competent authority for the EIA process in Albania is the National Environmental Agency (NEA), under the Ministry of Tourism and Environment. The project is expected to contribute to climate action and environmental sustainability (CA&ES) objectives. Some of the schemes have a highly positive environmental impact, with a strong emphasis on preservation of natural resources and its rational utilisation by local population and tourists. The Technical Assistance will support the promoter to comply with EIB's environmental and social requirements and to develop a stakeholder engagement framework, a resettlement framework and grievance mechanism for the project. The capacity of the promoter to comply with the requirements of the Environmental Impact Assessment Directive 2011/92/EU as amended by Directive 2014/52/EU, Birds Directive 2009/147/EC and Habitats Directive 92/43/EEC (to be completed as relevant/applicable) and the requirements of social standards will be verified during appraisal.

The Bank will require the promoter to ensure that implementation of the project will be done in accordance with the Bank's Guide to Procurement and the relevant applicable EU public procurement rules.

Under EFSD+ Guarantee