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Albania- Capacity to Repay the Fund, 2015–21

Albania- Capacity to Repay the Fund, 2015–21

In 2016, the World Bank provided a development policy loan of $175 million, and the EBRD is expected to provide a loan of €100 million to finance a restructuring of electricity sector debt. Meanwhile the EU is providing €20 million annually over the timespan 2016-18, in the form of a grant for balance of payments support linked to the implementation of Albania’s PFM (Public Finance Management) reform strategy.

As obliged Albania is expected to meet repayment to the Fund. Fund credit outstanding is projected to be 3.2 % of GDP, or 13.3 % of gross reserves. Debt service to the Fund is expected to peak in 2022 at around 0.5 %of GDP and less than 3 %of international reserves. External debt will decline to 37.2 % of GDP by 2021, with external public debt falling from 35.0 to 28.6 %of GDP. Risks to repayment capacity are mitigated by Albania’s strong record of repaying the Fund and by the authorities’ robust performance during the first two years of the program, including their willingness to move ahead with difficult structural reforms.

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