World Bank Group Approves First Country Partnership Strategy for Kosovo

May 29, 2012

Comprehensive support is planned for the period 2012–15

WASHINGTON, May 29, 2012 – Today the World Bank’s Board of Executive Directors welcomed the World Bank Group’s first Country Partnership Strategy (CPS). The strategy covers the years 2012–15 and supports Kosovo in accelerating economic growth, creating jobs, and improving environmental management. The choice of projects takes into account the country’s overarching objective of accession to the European Union.
The Board endorsed the World Bank’s proposed support to Kosovo. Executive Directors supported the strategy’s selective focus on accelerating broad-based economic growth and employment generation and improving environmental management. They appreciated the focus on helping Kosovo to address its severe electricity constraints, with a view to balancing the objectives of energy security, energy affordability, and minimal socio-environmental externalities. The Board underlined the importance of taking full account of environmental considerations, while mitigating risks and impacts in line with World Bank standards. Directors welcomed the efforts undertaken to minimize the need for coal-fuelled power, expressing fullest support for proposed CPS investments in energy efficiency and in renewable energy.
Ongoing work to reduce environmental hazards in Kosovo will continue and help move Kosovo toward EU environmental standards. A new project to enhance water supply is also planned. The strategy contains financial, technical, and analytical support for Kosovo to improve its business climate, upgrade infrastructure, and continue to support the country’s agriculture sector. The World Bank will also continue to invest in education and skills building, the regulatory and institutional frameworks for labor and social protection, and public financial management and anti-corruption efforts.
It is expected that International Development Association (IDA) funding for the CPS will be about US$76 million, supplemented by about US$66 million in grant funds channeled through IDA by donors. In addition, the International Finance Corporation (IFC), the World Bank’s private sector arm, aims to provide around US$40–50 million in direct financing to the private sector as well as additional funds for advisory services. The World Bank Group will also continue to support a broad development agenda through a robust program of analytical and technical assistance.
With high rates of poverty and unemployment, particularly among youth and women, Kosovo’s central development challenge is to create the preconditions for inclusive, sustainable growth," said Jan-Peter Olters, World Bank Country Manager for Kosovo. “Education and private sector investments are critical elements in a strategy that aims at generating high-quality jobs,” Olters added. “Kosovo realizes that important infrastructure constraints and other systemic issues will have to be addressed to attract investments of the scale and scope necessary to increase the economy’s overall productivity.”
The first CPS with Kosovo—closely aligned with national development priorities—follows a series of Interim Strategy Notes (ISNs) that have been implemented with the World Bank Group over the last decade. Since 1999, the World Bank has provided or managed around US$400 million to Kosovo through more than 30 operations, including trust funds. The World Bank portfolio currently consists of seven operations totaling US$76.9 million in commitments and 11 trust funds totaling US$66 million, including two State and Peace-Building Fund (SPF) grants. IFC’s portfolio comprises three investments totaling US$15.5 million as well as focused advisory services in key sectors.

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