EBRD to finance road works and support new strategy for Albania’s capital

In its first project in Albania’s municipal infrastructure sector, the EBRD is lending the Albanian government €14.6 million for the rehabilitation of roads in the capital, Tirana. The loan will finance the construction of the Kamza interchange.

Part of the loan will be on-lent to Tirana city authorities to finance the rehabilitation and upgrading of a 3.34 kilometre section of the Tirana ring road.

The project will be complemented by a creditworthiness enhancement programme and a sustainable transport strategy financed by Technical Cooperation funds.

The population of Tirana has grown from 320,000 in 1992 to around a million today. The level of motorisation has also risen sharply: In the late-1980s there were around 2,000 cars in Albania, while the number is now estimated to be close to 300,000. Traffic congestion and environmental pollution have become pressing concerns because of a lack of adequate infrastructure.

By financing the rehabilitation and upgrading of two key sections of the capital’s road network the project aims to ease traffic flow, reduce transport costs and improve the environment. In addition, the sustainable transport strategy will identify alternative ways to improve transport services in Tirana and develop a coherent and affordable action plan for the next five years. Grant assistance amounting to €600,000 is provided by Italy through the Italian Cooperation Fund for Private Sector Development in the Western Balkans and by the Central European Initiative – EBRD Trust Fund.

Another important component is the creditworthiness enhancement programme which aims to enable Tirana to borrow at city level under non-sovereign conditions for other urgent local infrastructure investments including water and wastewater services. This will be a key step in the implementation of the country’s decentralisation strategy. This grant funding is provided by the Italian Ministry of Foreign Affairs through the Central European Initiative.

Henry Russell, EBRD Deputy Director for Municipal Infrastructure, said the project will support Albania’s municipal reform with the objective of preparing the City for expected legal and regulatory changes that would permit towns and cities to borrow directly for local infrastructure improvements in the future. The Bank places a high priority on these efforts because it helps to encourage local political accountability for better local services.