Press statement of Nadir Mohammed, Country Manager in the joint press conference of the WB-MoF on the new Country Assistance for Albania

Thank You very much Minister Bode!

I’ll be very brief, and give you some highlights on the new CAS and then I will be happy to answer any question that you have. As Minister Bode mentioned, the Board of Executive Directors of the Bank considered last week a new Country Assistance Strategy for Albania. This is basically the business plan of the Bank’s support for Albania in the next four years. It has many features and I’ll just highlight some of those. One, it’s a strategy for four year. Second, it’s a joint Bank - IFC Strategy.

So for the first time also all World Bank Group Agencies proposed a cohered and consistent strategy of support. It’s a result - based strategy. Very shortly you will have it translated in Albanian. English and Albanian versions will be on the web site. I’m sure that most of you are thinking of all the amount of financing available which I will mention shortly, but it has a very transparent results framework: what the government intends to do and what we will support. But for accountability even for us in the Bank is four years under roll. You would ask us what amount of financing you provided to support the Government. Did you get all the result you said you would do. So, this CAS Strategy is very much based on the result framework.

Very good news for Albania is the amount of financing available. We expect in the next four years that about two hundred million US dollars will be available for Albania. In addition, to the usual grants and trust funds which are all grants. I’m just speaking about the credits that would be available. Let me also specify that we have already in our portfolio 15 projects. Between them they have total amount of two hundred and thirty million US dollars undisbursed. So, if you add the undisbursed balances to the new credits available this is more than four hundred million US dollar. The projects in the next four years are eleven projects. Three of them will be development policy loan of credits. These are basically direct support to the budget through the Ministry of Finance. Every year we will be supporting a number of policy reforms.

In addition, the CAS plans for eight investment projects. These are the typical investment projects that you know about. Very shortly, we hope before the end of June this year, the Board will consider three new projects. First one on education, quality and equity, that’s support to the education sector. We have a similar project for the modernization of the health sector and we have a new important project for enhancing the business environment. These three projects are already in advanced stage of preparation with the Ministries of Education, Ministry of Health and Ministry of Economy and Energy.

The other five projects, one of them will be next year, is a land urban development project. We have also plan for a new transport project and we have a plan for the second phase of the integrated costal zone management project. And we have plan for a new energy project. We have a project that we didn’t identify. We have some idea of what it could be. We want to give it some time to see if there is any developments in the business environment or the policy framework so we could than decide. It could be additional energy, additional transport, or water supply. We will take a joint decision on this with the Government in a year and a half. So these are in brief the main projects that we will support.

Let me say a few words on a very good news: Albania is considered credit worthiness for accessing IBRD resources. So, out of two hundred million dollars, eighty six million dollar is from IDA resources. But let me just explain you very brief, that’s about you so to capture it well. IDA is an agency that provides interest free credits to development countries. So there is no interest on it. Highly concenssional credits, twenty – forty years, ten years grace period, zero interest. Albania already by far passed that stage of development countries. But given to it’s good truck record and given also the special conditions of the country the Bank decided to allow more resources in the next four years, but that would be the last time. After these four years Albania should be IBRD only. IBRD not to be confused with EBRD, is another part of the Bank. It stands for International Bank for Reconstruction and Development which provide loans that carry interest but they are also development terms concessional than other commercial loans. It’s not automatic for a country, if it is not qualified for IDA it is qualified for IBRD. So, a country has to establish its credit worthiness. And I’m very happy that Albania established credit worthiness on IBRB borrowing. And in future can enroll more resources from IBRD. But this is also important in Albania effort to establish its credit worthiness for capturing the international capital market. So this is very important, I think milestone, a major development in Albania. We are very happy of this result. These are in brief the highlights of the CAS.

The Board of the Bank appraised the efforts that Albaniamade in its transition and post transition. And now all of us we move from the preparation stage and also this week we are now in implementation phase. And we will be happy again we moved forward to share with you any information that we have. Let me thank Mr. Bode again and Deputy Minister Shehu for supporting this process in the last four of five months. But I would like also to extend my sincere thanks to the previous collaborators. As I mentioned this process has been very extensive, it took more than a year in terms of preparation, and I would like to thank all the key government officials of different ministries that played a very important role. I would like also to thank the former Minister of Finance Mr. Malaj, Deputy Minister Mr. Dritan Shano for kicking the start in this process and would like also to thank the Parliament and the institutions of their parliamentary committees and I have in mind the Economic and Financial Committee Mr. Edmond Spaho, and before him also Mr. Ylli Bufi and Mr. Jemin Gjana in his capacity as former head of Agricultural Commission.

I would like also to thank all the donor agencies that played important role in helping us to design the strategy. I would like also to thank local authorities and in particular Mayor of Kukes and Mayor of Fier for leading our consultation in the north and in the south and all the mayors and head of communes that took active part in the discussions. I would like also to sincere thank a number of NGO-s and civil society organizations, that through a number of consultative processes helped us in the design of strategy and would like also to thank private sector institutions and chambers of commerce, the head of the banks and many active private sector representative. And one final word I would like also to thank a number of youth organizations who helped us in the preparation of this strategy.

And my final thank you also to the representatives of media. You provided us with a number of insights not only for the future but also how effective we have or not have been in the specific sectors. I’m sure that I forgot a number of names and institutions that helped us in the design of the strategy, but this consultation process was so extensive, we strongly feel that it really represent a national interest and it has been manifested again in the joint retreat we had with the government, in which his Excellency the Prime and Deputy Prime Minister and Cabinet Minister had extensive discussions on the strategy to make sure that it really represents the priorities of the new government.

Again, this is behind us, now the challenge is how to implement it and how to get the result that we said that it will be achieved. The document will be disclosed and we are in the final stages of making sure that it is fully translated in Albanian. We will provide hard copies of this strategy in both languages, and we will put it on the web site so it will be available to any reader who wanted to know about this CAS. Thanks, I think I should stop here and would be happy to answer any question for me or for Minister Bode on this strategy.

Question from TOP CHANNEL: What in your view was the rate of implementation of the previous CAS? To what degree was this achieved? What is actually the percentage of the fund that was basically attracted from the credits in general? What will be the place for the Durres – Kukes road and TEC?

Let me start first. We have prepared what we call a CAS Completion Report. Before we start the new strategy we are request to make an evaluation of how well did we or didn’t we do to the previous one. This is again a public document. Let me summarize how we do it first. We do a survey, which we completed but we also look at two things: we look at project portfolio and we look at how much the project reform and you know the Bank has an independent like our internal audit and external audit. So we have Operation Evaluation Department that look at each project when it closed and we have an internal review of each project. And there is another public document from Independent Evaluation Group, it’s now on the web or you can have a copy from our PIC or come in our office. This is a complete evaluation department outside management of the Bank, it reports to the Board. And they make an evaluation on the strategy for the last eight years.

I think the assessment to give you short answer that is was overall satisfactory, but the rate of progress was not the same on all the aspect of the strategy. In areas in which there is very good government strategy and leadership and an action plan progress was very good. In other areas progress fell short than expectation. Particularly areas of governance, so the outcome on improve governance fell down our expectations. Our assessment there fore is unsatisfactory because we didn’t do very well in some areas despite the fact that we did very well in financial sector, in infrastructure in other areas. Our support to improving governance is not least to the expected results. Have a careful look at the evaluation report, it is very detailed, sector by sector.

Now let me respond to the second part of your question. On average the Bank disburses between 50 – 60 million dollar a year. We can provide you with annual figures but this is basically, the expressment on other projects in the last few years. Project implementation of the current projects in the portfolio improved significantly. We have now a very healthy project. From 15 projects almost all of them are making very good progress in implementation. We don’t have problem project in portfolio. We have a very effective management of the portfolio together with the Ministry of Finance. We usually resolve all the implementation issues in weekly meeting we do with the Mr. Shehu. And if there are any problems in the portfolio we usually brief Mr. Bode and I think we are making good progress. So to be short, our portfolio is very healthy. The implementation in most of the projects is going quite well. When we have problems we have to take measures to resolve them.

Regarding Durres – Kukes road we have been informed by the new government, that it remains a national strategy, a national priority and it is very likely that our new transport project will provide financing for this corridor. We will start the preparation of the new transport project shortly so we will have a mission that will come hopefully in February. They will need to work with Minister Basha on what the components of this new project are likely to be. We are expecting Government approval of the Albanian National Transport Plan. That’s a plan that has been supported by the European Government.