EBRD and EU scale up support for Albania’s railways

In a significant move towards enhancing Albania's strategic transport links, the European Bank for Reconstruction and Development (EBRD) is taking the lead in a €373 million railway project. The initiative involves the rehabilitation and electrification of the Vore-Hani i Hotit railway line, a crucial 120 km connection between Vore in central Albania and Hani i Hotit on the Montenegro border. This venture is poised to bolster regional connectivity in the Western Balkans, fostering integration with EU markets.

The EBRD is extending a €98.75 million sovereign loan to the Albanian government for this ambitious project, which is co-financed by the European Investment Bank (EIB) and the European Union (EU) through the Western Balkans Investment Framework (WBIF). The EU is contributing €128.8 million in grants and providing technical assistance support totaling up to €12.1 million.

The agreement was formalized at the Western Balkans Investment Summit 2024, where EBRD President Odile Renaud-Basso and Albania’s Deputy Prime Minister and Minister of Infrastructure and Energy Belinda Balluku signed the loan agreement. The beneficiary of the project is Hekurudha Shqiptare, the state-owned railway company responsible for Albania's rail network.

The Vore-Hani i Hotit railway line, an integral part of the Trans-European Transport Network (TEN-T) extension in the region, serves as Albania's sole railway connection with neighboring countries. This initiative is expected to not only enhance regional connectivity but also contribute to Albania's social and economic development.

One of the project's key objectives is to facilitate a modal shift from road to electrified rail, promoting a more efficient and environmentally friendly mode of transportation. The move aligns with green transition goals and addresses the need for sustainable infrastructure development in the country.

In addition to its economic impact, the project supports the reform agenda in Albania by aiding the railway company in preparing for the operational phase. This involves the development of a framework public-service contract in accordance with international best practices.

EBRD President Odile Renaud-Basso emphasized the strategic importance of regional connectivity in the Western Balkans, underlining the commitment to Albania's European future through milestone projects like this.

Albania’s Deputy Prime Minister and Minister of Infrastructure and Energy, Belinda Balluku, expressed gratitude for the consistent support from the EBRD and the EU. She highlighted the broader national strategy to enhance the quality and accessibility of rail services, contributing to economic growth, social development, and the promotion of green, sustainable economies in the Western Balkans.

This project marks EBRD's second railway investment in Albania, building on the ongoing €36.9 million loan for the Tirana-Durres section, which is currently in progress. The collaborative efforts with the EU and the government of Albania reflect a broader commitment to transformative infrastructure development in the region. To date, the EBRD has invested approximately €2 billion in Albania through 149 projects, further solidifying its role as a key partner in the country's economic advancement.