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This is the largest amount that Albania has required from an international financial institution in recent years after receiving support in some sectors such as energy, infrastructure, tourism, and urban management.
The government has argued that this project aims to provide better service to citizens as well as to take measures to make drinking water accessible to all. The conceptual outline of the project, which is in its infancy, explains that the project will help authorities build a new approach to more financially sustainable enterprises.
The institution that presented the project is the Ministry of Infrastructure and Energy, with the closest bank board meeting date being March 9, 2020. The objective is described as strengthening the institutional policy framework and capacity to improve service access and financial sustainability. water and sanitation enterprises.
The project presentation highlights the sector strategy for 2020-2030 that the ministry has already put out for consultation and still has to go through the necessary approvals. The strategy estimates that there is a need for large investments in the sector totaling 1.5 billion euros.
In the same document, the government foresees a 75 percent increase in water tariffs to cover the costs that the strategy will require. This increase by the government is possible as it is affordable and household spending on the water is below the 5 percent threshold, and exactly 2.2 percent.
“The National Strategy Sector of Water Supply also includes improvements in setting tariffs in accordance with the following principles: Level of cost recovery from tariffs; cost-based fees; tariff policies and tariff setting will ensure that Water Supply services are affordable in line with international best practice, stating that tariffs should be affordable given that water and sanitation bills should be no more than 5 percent of household income for lower-income families, the government document specifies.