Albania

In 1988, Albania became the first cooperation partner for Germany's bilateral development cooperation in South-Eastern Europe. Since 1990, Albania has made a transition from a Stalinist dictatorship to a parliamentary democracy.

Among policymakers and within society in Albania, there is a basic consensus in support of democracy and the rule of law, a market-based economy, NATO membership (since 2009) and a regional policy that is geared towards mutual understanding. Albania's most important foreign policy goal is to become a member of the European Union. In 2014, the country was awarded candidate status by the EU. The official negotiations on accession began in 2022.

The most urgent task in terms of domestic policy are the improvement of people's living conditions and the creation of jobs, especially in rural regions. Poor infrastructure, inadequate public services and a lack of economic opportunities are causing people, especially young people from rural areas, to leave for the cities or for other countries.

Albania is suffering from the economic impacts of Russia’s war of aggression in Ukraine, for instance from rising energy prices. Germany is supporting Albania in its efforts to improve the power supply and increase energy efficiency. Germany also helped Albania cushion the impact of the COVID-19 pandemic. This included topping up Albania’s credit guarantee fund so as to boost the solvency of small companies.

German development cooperation with Albania

Cover: Strategy for development cooperation with transformation partners in South-Eastern and Eastern Europe and the Southern Caucasus

Albania is one of the transformation partners of the Federal Ministry for Economic Cooperation and Development (BMZ). In the case of these countries in the EU’s neighbourhood the BMZ supports political and economic transformation processes and efforts to increase alignment with the European Union (introduction of the EU’s acquis communautaire, i.e. the binding rights and duties of all EU members).

At political talks and government negotiations, the Albanian and the German side agreed to focus cooperation on the following core areas.

Sustainable economic development, training and employment
Areas of intervention: technical and vocational education and training, private sector and financial sector development
Climate and energy, just transition
Areas of intervention: renewable energy and energy efficiency, sustainable urban development (transport, waste water, waste)

Other areas of cooperation are good governance and making migration work for development.

The activities under German development cooperation focus on Albania’s most urgent needs and contribute directly to bringing living conditions to EU level.

Germany is the country’s largest bilateral donor and has committed more than 1.2 billion euros since cooperation began, mainly in the form of reduced-interest loans. Government negotiations are held every two years. In December 2022, the BMZ committed 74.3 million euros in new funding to Albania. This comprises 69.3 million euros for Financial Cooperation and five million euros for Technical Cooperation. In 2021/2022, an additional 34.5 million euros were made available, including from the COVID-19 emergency support fund, to support ongoing projects.

Albania also benefits from numerous multi-country regional projects run by the BMZ. Examples include the Open Regional Funds for foreign trade, energy efficiency, municipal services, EU integration and biodiversity.

The next government negotiations are scheduled to take place in mid-2024.

Training of chefs in a vocational school in Kamza, Albania

German development cooperation activities are intended to help create more jobs in Albania, with a focus on the long-term viability of the jobs, and ensure people earn higher incomes. Together with the Albanian government, Germany has drafted an employment promotion strategy that is now being implemented.

Construction of high-voltage transmission line near Shkoder, Albania

Germany's activities in Albania are intended to help ensure that the country, and the entire region of South-Eastern Europe, has a power supply that is stable, sustainable and secure, and covers its costs. They also aim to make a contribution to global climate protection. In addition, Germany is also involved in sustainable urban development and in efforts to improve water supply and waste and wastewater disposal in Albania.