The Board of Executive Directors of the World Bank has today approved the First Development Policy Loan (DPL) for Kosovo`s Fiscal, Competitiveness and Green Growth Policy (DPL), which aims to increase the effectiveness of fiscal policy, strengthen the climate of investments and lay the foundations for greener economic growth in Kosovo.

The press release states that the financial support approved for this first DPL is 90.3 million euros (equivalent to 100 million US dollars), a concessional loan from the International Development Association (IDA), part of the World Bank.

The loan repayment period for this operation is 12 years, including a 6-year grace period, and is without interest or service charges.

After approval by the Board of Executive Directors, the Government of Kosovo and the World Bank will sign a project financing agreement that needs to be ratified by the Assembly of Kosovo to enable DPL funds to be made available for disbursement for the benefit of the citizens of Kosovo.

"The new operation is part of a two-part program series that contributes to the creation of jobs, better welfare, and a cleaner environment for the people of Kosovo, supporting the country's efforts to address some of the long-term structural obstacles that hinder a higher, more inclusive and more sustainable economic growth," said Massimiliano Paolucci, World Bank Manager for Kosovo and North Macedonia.

The announcement further states that the continuous economic progress since independence in 2008, driven by the ambition to integrate into the European economy, enabled Kosovo to pass in 2018 to the status of an upper middle-income country.

"However, to sustain economic growth and accelerate poverty reduction, the country must shift to a more competitive growth model that creates more and higher-quality jobs, supports firm growth, and is driven by higher productivity up. The recent crises reaffirmed the urgency for structural reforms to increase the effectiveness of fiscal policy to then mitigate the impact of crises," it is further stated.

DPL supports a reform program that strengthens domestic revenue mobilization and improves public financial management, as well as the investment climate by improving trade facilitation systems and the legal framework for land administration. The loan also supports measures aimed at increasing protection for vulnerable consumers in the electricity sector, while strengthening the framework for renewable energy production, improving energy performance, and reducing the use of lightweight plastic carrier bags.