New Loan to Boost Rural Incomes in Kosovo

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WASHINGTON, April 28, 2017 — A new, €20.80 million World Bank loan will help boost rural incomes in Kosovo through investments in the country’s agriculture sector, particularly horticulture and livestock. The loan builds on earlier investments, which have helped train over 2,500 farmers and agro-processors in preparing grant applications. More than 700 beneficiaries have also received grants to build greenhouses, barns and cow sheds, plant orchards, buy farm equipment and make other investments.

The Additional Financing for the Kosovo Agriculture and Rural Development Project will scale-up existing activities as well as finance new activities to enhance the project’s developmental effectiveness. It will contribute to increasing: farm and agro-enterprise productivity and profitability; agricultural exports, especially in high-value products; employment in rural areas – both long-term and seasonal; rural incomes; and economic opportunities for women and youth in the agricultural sector.

Currently, despite recent gains, the sector is not meeting its productive potential. Kosovo is the largest importer of food per capita in Europe. The country is highly dependent on imports to meet its food demands and has a high export/import ratio. Over 62 percent of the country’s population lives in rural areas, where poverty and unemployment is especially high. The lack of job perspective, especially among the rural young population is putting a strain on social cohesion and encouraging out-migration.

“Agriculture remains a critical sector of Kosovo’s economy with strong potential for contributing to increased domestic productivity and export competitiveness as well as for stimulating employment,

especially among women and youth, and reducing poverty”, said Marco Mantovanelli, World Bank Country Manager for Kosovo. “The World Bank is pleased to support Kosovo’s efforts to re-vitalize its agricultural sector”.

With project support, medium- and large-scale processing companies are becoming economically viable and profitable as they increase investments in advanced technologies, increase production/productivity and improve quality of their products. Smaller companies are scaling up and upgrading their infrastructure, together with the quality of their products to the standards necessary for competitive market presence.

Smallholder farmers are being increasingly integrated into the remunerative livestock and horticulture value chains. The project’s grant program also has built-in mechanisms to encourage women and youth to participation in and benefit from the project.

To be implemented over four years, the Additional Credit will also provide support for rehabilitation of the Radoniqi and Dukagjini Irrigation Schemes located in an area well known for its horticultural production. The project will also finance the development of a national strategy for irrigation development to guide future investments in the irrigation sector to increase agricultural productivity as well as build adaptive capacity to address potential impacts of climate change.

The loan is a Credit from the International Development Association (IDA) of the World Bank Group, which is the fund for the countries with greatest development needs. IDA credits are provided on concessional terms with zero or very low interest charge and long repayment periods. The loan has a maturity of 25 years, including a 5 year grace period.

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