Green and sustainable development - Government approves 113.6 million euro loan
At its last meeting, the government approved in principle the loan agreement between Albania and the EBRD for the second part of the “Renewable Capacity and Green Development” program. This is a loan of 113.6 million euros that will be used for development policies. The first part of this loan of 110.8 million euros was passed by special law by the Assembly in July 2023.
According to the agreement, the loan is taken in the form of budget support, meaning it goes entirely to the general financing of the state budget and the general deficit. The loan is from the World Bank, so it is on concessional terms, much easier than commercial terms.
The terms are specifically: maturity of 18 years, including a principal payment of 5 years and an interest rate determinable on a market basis at the time of disbursement, based on the Euribor reference rate, with a fixed margin of 1.17%, as well as a management fee of 0.25% of the loan.
What will the loan be used for? The objectives of this 2-credit program are: sustainable strengthening of sectors; strengthening the energy market framework, as well as increasing renewable energy capacities and energy efficiency; protecting the environment and minimizing the impact of climate change.
This consists of three pillars: the first pillar supports the expansion of the tax base to return mechanisms for mitigating risks from natural disasters, improving the resilience of public investments from climate change and increasing the effectiveness of social assistance programs; the second pillar supports the increase of renewable energy capacities and the efficiency of energy use in the public sector; the third pillar supports new legislation to minimize pollution, as well as regulations to establish a monitoring, reporting and verification mechanism for greenhouse gases.
The loan users will be the Ministry of Infrastructure and Energy, as well as the Ministry of Tourism and Environment.
DECISION
ABOUT
APPROVAL, IN PRINCIPLE, OF THE LOAN AGREEMENT BETWEEN THE REPUBLIC OF ALBANIA AND THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, TO FINANCING THE PROGRAM “RESILIENT CAPACITY AND GREEN DEVELOPMENT – SECOND LOAN FOR DEVELOPMENT POLICIES”
In accordance with Article 100 of the Constitution, Articles 26 and 27 of Law No. 9665, dated 18.12.2006, “On State Borrowing, State Debt and State Loan Guarantees in the Republic of Albania”, as amended, and Article 10 of Law No. 43/2016, “On International Agreements in the Republic of Albania”, as amended, upon the proposal of the Minister of Finance, the Council of Ministers
DECIDED:
Approval, in principle, of the loan agreement between the Republic of Albania and the International Bank for Reconstruction and Development, for the financing of the program "Renewable Capacity and Green Development - Second Loan for Development Policies", with a loan in the amount of 113,600,000 (one hundred and thirteen million six hundred thousand) euros, according to the text attached to this decision.
This decision takes effect immediately.
PRIME
EDI RAMA
In the absence and on order
DEPUTY PRIME MINISTER
BELINDA BALLUKU
Poll
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