Performance grant, what changes in 2026? - Farrici: All municipalities are placed on an equal footing
The concept of the Performance Grant for municipalities will be deepened this year. This was announced by the Minister of State for Local Government, Ervin Demo.
But what does this mean and what will be the changes compared to last year?
Adelina Farrici, Director of the National Association of Municipalities of Albania:
"It is a grant deserved by local government, based on performance. During the first year it was a grant of 50% donors and 50% of local government and to make this sustainable, the grant should start to be more of the central government than of the donors year after year. The positive news has to do with the sustainability of this grant and the second has to do with the amount. A larger amount will go to the municipalities. The municipalities will have the opportunity to improve a service, to invest somewhere.
What we identify and the municipalities are asking for is to put all 61 municipalities on an equal footing. If the first year of the grant was more of a grant that helped municipalities get on an equal footing, now there should be some criteria that evaluate the work of the municipality, in terms of financial management. So, not generating debts, increasing revenues, using these revenues efficiently. This should also be related to the relevant services. We now have plans for the services that the municipality offers, the issue now is monitoring the improvement of services, because year after year we must have improved services, this is also related to the integration process, where municipalities must meet EU standards in services.
"The good news is that all 61 municipalities benefited from this grant. Some municipalities have benefited more and some less. There is no municipality that has stood out above the others, as the indicators vary ," said Farrici.
However, in addition to the performance grant, according to Farric, other incentives are needed from the central government to increase the competitiveness and performance of local institutions.
" There is a competitive grant from the central government for investments in local government. I think this competitive grant should be divided. A grant that goes with a formula and another part should be competitive. This competitive grant generally excludes small municipalities, which have needs, but do not have good capacities, to design good projects and to be competitive with large municipalities. So that medium and small municipalities are not excluded, it would be good if this grant could be divided 40% or 60% by formula and all municipalities benefit and the rest be a competitive grant ," according to Farric.
During 2025, a total of about 4 million euros have been allocated as performance grants to all municipalities in the country.
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