Getting projects off the ground and making them fit for financing is not easy. Often, it takes years to gatherall the pieces – from preparing the project documentation to finding the funds.
To help Western Balkan countries get strategic projects off the ground, the European Commission launched the Western Balkans Investment Framework (WBIF) in 2009.
“By bringing together the European Union, international financial institutions, bilateral donors and beneficiaries, the WBIF is able to mobilise a much larger amount of total investment for projects in the areas of transport, energy, climate and environment, human capital and private sector development.”, says Holger Schröder, head of unit for Western Balkans Regional Programmes in the European Commission’s Directorate-General for Neighbourhood and Enlargement Negotiations.
It provided critical assistance to the Western Balkan economies and supported the region in advancing on the accession process and convergence towards the European Union.
Investment capacity in the Western Balkans
The WBIF is the main vehicle for implementing the EU’s Economic and Investment Plan for the Western Balkans adopted in 2020, to spur the long-term economic recovery of the region and foster regional socio-economic integration.
Under the Economic and Investment Plan for the Western Balkans, the WBIF has endorsed 68 flagship projects that are expected to mobilise €10.5 billion in total investment, including €3 billion in EU grants, in sustainable transport, energy, environment and climate, digital, human capital and private sector development.
Some of the expected results of these projects include:
- 489 km of new and upgraded railway lines.
- 1,920 MW in renewable energy capacity.
- 123 km of transmission lines.
“The projects supported by the WBIF directly benefit citizens and businesses in the Western Balkans, for example by providing an estimated 1.2 million people with improved drinking water and sanitation or supporting education for 220 800 students” Schröder says.
Whilst grant funding is important, the European Union also provisions funds for guarantees through the Western Balkans Guarantee Facility to minimise investors’ risk and thus enable investments. The WBIF also supported the Western Balkans during the COVID-19 pandemic and the energy crisis with the €1 billion energy support package.
Crucial partner
The European Investment Bank, the financing arm of the European Union, is one of the founding WBIF partners. The European Investment Bank is leading on 23 out of 68 flagship investments under the Economic and Investment Plan for the Western Balkans. These EIB-led investments under the Plan received €1.7 billion in EU grants for a total investment of €5.3 billion in renewable energy, water supply and wastewater treatment, education infrastructure, and rail, road, and waterborne transport projects.
“The long-standing partnership with the European Investment Bank is critical to the success of the WBIF, notably on investments in large infrastructure,” says Schröder. “We also appreciate the European Investment Bank as a key partner in the implementation of the European Fund for Sustainable Development Plus guarantees.”
48% of EU funds channelled through the EIB
Since 2009, European Investment Bank-led investments under the WBIF received €2.1 billion in grants for €15.6 billion in total investment value. Overall, 48% of WBIF funds have been channelled through EIB-led investments.
That includes the rail Corridor X in Serbia, which will modernise the main north-south route running through Serbia and is an integral part of the extended core Trans-European Transport (TEN-T) Network connecting Western and Central Europe with Greece, Türkiye, and Western Asia.
In addition, it is the main international financial organisation supporting the building of a new wastewater treatment plant in Podgorica and an extension of the sewerage network. The European Investment Bank is also leading the development of a new 132 MW wind farm in Bosnia-Herzegovina, which will produce energy equivalent to the annual usage of 72 700 households.
Growth Plan for the Western Balkans
Schröder also highlights the key role the European Investment Bank and other WBIF financial partner institutions play in the new Growth Plan for the Western Balkans. Adopted in 2023, the Plan aims to bring Western Balkan partners closer to the European Union by accelerating socio-economic convergence and offering some of the benefits of EU membership to the region in advance of accession.
The Plan includes an increase in financial assistance in the form of the €6 billion Reform and Growth Facility, of which at least half will be channelled through the WBIF for targeted infrastructure investments in the areas of transport, energy, digital, human capital development.
To access this funding, each beneficiary will have to make progress on structural socio-economic and fundamental reforms specified in Reform Agendas.
“The partner economies have also identified in their Reform Agendas an indicative list of infrastructure projects to be kick-started in the period 2024 to 2027,” Schröder says. “These projects are expected to crowd in further investments from WBIF partner financial organisations and bilateral donors.”
