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Even the year 2025 witnessed a chronic weakness in the allocation of foreign financing according to plans, as the use of funds from the European Union Growth Plan, as part of the investment item in fiscal statistics, completely failed.
Official data from the Ministry of Finance shows that, although an allocation of 700 million lek (7 million euros) was planned as part of the EU Growth Plan in the area of investments from foreign funds, the actual realization for 2025 was zero.
Unlike domestic funds that depend on the will of the government, the 700 million of the Growth Plan are linked to reforms.
If Albania does not meet specific steps in the rule of law, procurement or administrative reform, as dictated by the Growth Plan, Brussels does not allocate funds. Also, EU funds require strict feasibility standards that our institutions often fail to prepare in time.
Albania has begun to benefit from the first funds from the European Union's Growth Plan for the Western Balkans 2024-2027, but the amounts are modest and far from the initial plan.
The EU Enlargement Directorate, in an analysis of "EU Funds in Albania" for the year 2025, noted that the growth plan for Albania includes an amount of 922.1 million euros in the form of non-repayable grants and loans with favorable terms for the implementation of this reform agenda, which can be used throughout the period 2025-2027.
In total, the funds withdrawn so far amount to around 163.8 million euros. Albania has benefited from around 17.7% of the total financing foreseen by the Growth Plan, while around 758 million euros still remain to be disbursed this year and next, depending on the progress of reforms and the fulfillment of the objectives set by the European Union.
The energy sector presents the most drastic situation within the scope of foreign investment. Out of an ambitious plan of 2 billion lek from foreign financing, not a single cent was allocated in 2025.
Last year, around 36 billion in foreign investments were planned, but only 20 billion were realized, or 44% less than planned. The year 2025 has reinforced the trend where the government and its structures show weaknesses in absorbing foreign financing.
The World Bank, EBRD or KFW have much more rigorous procurement rules than domestic ones. Any complaints from businesses in tenders or delays in the approval of documentation by lending banks postpones the disbursement of the fund to the following year.
Also, many foreign investments remain on hold because the government fails to close land expropriations on time, causing donors to not release the next installments. Although total capital investments last year were around 1.4 billion euros, an increase of 10% compared to 2024, this came mainly from domestic financing./Monitor
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