constituencies. Finally, the paper aims to identify concrete recommendation on improving the situation on infrastructural connectivity between Albania, Kosovo* and Serbia in the context of economic growth and future prosperity that facilitates the EU integration process, by highlighting priority areas and potential win-win outcomes. Improved reforms, better prioritization and increased cooperation can contribute to the progress towards the economic growth driven by specific evidence-based policy options for enhancing infrastructural connectivity. This paper draws from evidence provided mostly by the Western Balkans Investment Framework (WBIF) and European Commission reports, national reports and strategies, as well as interviews conducted in July-September 2018 with national stakeholders from Albania, Kosovo*, and Serbia. ALBANIA The National Strategy for Development and Integration (NSDI) 2015-2020 considers the connectivity agenda as a cornerstone for the socio-economic development of Albania. The benefits rising from its materialization should contribute to creating new job opportunities and improved physical connectivity. The projects in infrastructure are expected to lay down the foundations for a national multimodal transport system – which would then increase the volume of trade exchanges and economic growth. Meanwhile the investments in energy are expected to make an optimal use of the electricity nation-wide, reduce the network losses and frequent interruptions to households and business consumers, besides raising the credibility and quality of the provided service. Up-to-date Albania has seen approved four connectivity projects, out of which three are in the field of transport - namely in railways, road infrastructure and rehabilitation of parts of the Port of Durres - and one in the energy sector.
Table 1: 2015-2018 Connectivity Agenda projects endorsed for Albania Project code Title of operation Partner institutions Project value EU Grant National (beneficiary) contribution Loan Loan institution Expected completion Current phase Mediterranean Corridor: rail interconnection (Rehabilitation of section Durres-Tirana, new railway to Rinas branch) Ministry of Finance and Economy; Ministry of Infrastructure and Energy; Albanian Railways 90.45 mil 32.9 mil (works and supplies); 2.7 mil (project implementation support); EBRD grant 0.87 mil (institutional capacity building) 16.06 mil 36.87 mil EBRD 12/31/2020 Trending Durres port, reconstruction of quays 1 & 2 Ministry of Finance and Economy; Ministry of Infrastructure and Energy; Durrës Port Authority 62.5 mil 27.7 mil 9.3 mil 25 mil EBRD 12/31/2018 Preparation Feasibility Study for Adriatic Ionian Highway/Expressway (Route 1 & Route 2) Ministry of Infrastructure and Energy 3.5 mil 3.5 mil / / / 4/30/2019 Preparation Albania - the former Yugoslav Republic of Macedonia power interconnection (I): Grid section in Albania Transmission System Operator in Albania (OST sh.a.); Ministry of Finance; Ministry of Infrastructure and Energy 70 mil 14 mil (20% of investment cost), out of 2.53 mil (project identification and preparation costs); 1 mil from other grants 5 mil 50 million KWF 12/31/2021 Tendering Source: WBIF, 2018; Albanian Parliament 2017. Greece
Core Network, Durres Port: Reconstruction of Quays 1 & 2 The Port of Durres is the biggest in Albania, handling around 75% of trade exchanges, although its quays (i.e. are suffering of serious structural problems, such as the extensive corrosion extent or the limited cargo capacities, which requires a soon to be intervention on the ground. A feasibility study was completed in 2014, however it did not have any follow up at that time. At the moment the financial agreement has not been signed yet, apart from the approval of the EU grant of €1.1 million grant in order to conduct a new feasibility study (to be completed by the end of 2018), the update of the detailed project design and the tender documentation. Upon condition of the loan approval in time by EBRD, the works on the ground should start by mid-2019 and get concluded by 2023. Together with the railway project Durres-Tirana-Rinas airport, this investment at the port is expected to contribute to the establishment of a major multimodal transportation core network corridor section in Albania and at the regional level. Energy: On hold further notice Albania prioritizes its firm anchoring in the regional energy among which the establishment of the interconnection grid with Macedonia and the operability of the grid with Kosovo*, as well as the integration in the ENTSO-E network. At the moment it has in place functional power interconnection grids with Kosovo*, Montenegro and Greece, where the former was completed in 2017 and is yet not operational due to the bilateral dispute between Kosovo* and Serbia. Although not functional, this power interconnection line constitutes a financial burden for both Albania and Kosovo* and a solution is needed before the system starts deteriorating. Notwithstanding the field ambitions, in terms of present challenges, Albania still needs to sufficiently meet the domestic energy demand so as to guarantee an adequate economic and social development, along with establishing of a competitive energy market and consolidating the related institutional and legislative framework.
Table 3: 2015-2018 Connectivity Agenda projects endorsed for Serbia Project code Title of operation Partner institutions Total Project value EU Grant National (beneficiary) contribution Loan Loan institution Expected completion WBIF CF 1003 SER ENE Trans-Balkan Electricity Corridor (II): Grid Section in Serbia Kragujevac-Kraljevo Electricity Transmission System Operator in Serbia (JP EMS); Ministry of Mining and Energy 28 mil 6.6 mil (24%, 5.6 mil investment and 1 mil technical assistance) 7.13 mil 14.27 mil KfW End of 2018 IPA Project of Energy Community Interest: Serbia (Niš) - Bulgaria Gas Interconnector Ministry of Finance; Ministry of Energy and Mining; Public Enterprise Srbijagas 85.5 mil 49.6 mil (works and supplies; technical assistance) plus 1 mil previous EU/WBIF contribution (for project preparation) 35.9 mil / / End of 2022 IPA Orient/East-Med Corridor (CX): Serbia – the former Yugoslav Republic of Macedonia Rail Interconnection Ministry of Construction, Transport and Infrastructure; JSC Serbian Railways - Infrastructure (Železnice Srbije Akcionarsko Društvo) Central Finance and Contracting Unit (CFCU) - Ministry of Finance 62.7 mil 47 mil (75% of investment cost); 1.5 mil (project preparation support) 15.7 mil / / End of 2019 IPA Orient/East-Med Corridor (CX): Intermodal Terminal in Belgrade, Serbia Ministry of Construction, Transport and Infrastructure; Central Finance and Contracting Unit (CFCU) - Ministry of Finance City of Belgrade 15.5 mil 13.8 mil (89% of investment cost); 2 mil (project preparation support) 1.7 mil (City of Belgrade contributes additional 4 mil for land expropriation) / / End of 2019