The World Bank is set to plow a $75 million loan and $6.3 million grant into Albania to help modernise the country’s water supply and sewerage system.
In 2022, Albania’s drinking water is still not safe for consumption in every household and sewerage systems are not centralised or reliable. Furthermore, in the capital of Tirana, water does not run 24 hours a day with some localities only getting it three times a day for a few hours in total.
Albania is not short of water resources to provide fresh and safe drinking water, but it lacks a modern infrastructure, despite decades of political promises. Furthermore, water companies lack technical capabilities and are unable to reach vulnerable populations in urban and rural areas.
For example, some 20% of Albania’s rural communities are not part of the water supply network and 37 out of 58 regional companies depend on funding from the state.
“Radical changes are needed to improve the quality and sustainability of water supply services. We congratulate the Government for its commitment in reforming these services in Albania “, said Emanuel Salinas, Manager of the World Bank Office for Albania.
He continued that the World Bank will support the sector through an innovative financing instrument called the Results Program. “This means that instead of securing funding for infrastructure, we should focus on supporting institutional reform, or as we say informally, ‘instead of fixing the pipes, fixing the institutions that should fix the pipes.'”
The latest tranche of cash will form part of a larger sum of $135 million, co-financed by the Swiss State Secretariat for Economic Affairs, and will be managed by the World Bank.
Money will be spent to meet structural challenges, extend drives to semi-urban and rural areas, and improve the performance and sustainability of water utility companies, thus reducing their reliance on the government.
“The new operation uses a Program-for-Results (PforR) financing instrument, which links disbursement of the loan directly to the achievement of specific program results. The grant will provide financing for technical assistance, capacity building within central sector institutions, and implementation and monitoring, as well as evaluation of the program results,” the press release states.
It is hoped that a more efficient use of public funds will improve the lives of the public and improve the economy, while higher quality services for households will positively impact tourism, job creation, and poverty reduction.
The program has been drafted and will be implemented jointly with the Ministry of Infrastructure and Energy, the National Agency for Water Supply and Sewerage and Waste (AKUM), as well as the Ministry of Economy and Finance, the press release concludes.