Donor Co-Financing Assessment for New Country Strategy
1. Implementation of Previous Strategy (2017-2021)
1.2. Implementation Challenges and Key Lessons
Context for Implementation
European Bank
for Reconstruction and Development
The country continues to face unique challenges in terms of its institutional and economic fragmentation, thus making decision-making slow and sub-optimal,
and hindering necessary structural reforms. Consequently, economic growth has been stable but below that of regional comparators. During the strategy
period there has been little progress in the areas identified by the EU to address for the status of EU candidate country. The state's footprint remains large in
the economy, with insufficient progress on depoliticising, reforming, commercialising or restructuring SOES. Since the start of operations, the EBRD has
invested over €2.75bn in 189 private and public sector projects, delivering high transition impact through capacity-building and scaling up of the private
sector, developing key transport and energy infrastructure and supporting energy efficiency improvements, while helping municipalities' provision of key
services. Donor support has been instrumental for enabling the Bank's delivery along its strategic objectives, particularly for municipal infrastructure projects
and credit lines supporting standards and SME competitiveness.
•
Implementation Challenges
No serious progress on key reforms, including towards EU candidacy
status, as a result of the general political stalemate in the country, as
well as significant delay in the formation of the government during the
strategy period
Large infrastructure financing needs combined with low efficiency and
low implementation capacity of SOES, including municipal companies
who are in charge of most public services
No significant progress on privatisations, improving the business
environment or creating a single market, which could attract FDI or
increase private investment
No progress on renewable energy regulatory refoms which would
open the market for private investors
•
Key Lessons & Way Forward
Continued co-ordination of activities with EU, IFIs and donors.
Focus on project specific governance reforms in the public sector
(transport, municipal infrastructure) and capacity building
Promotion of state and entity level SOE reform and corporate
governance improvements where opportunities arise, and alongside
the EU, IMF, IFIs and donors
Provide clients implementation support for key infrastructure projects
Support small pockets of reform efforts and regional economic
cooperation
Focus on private sector green initiatives and energy efficiency
Large challenges in the energy sector require multiple policy
approaches, e.g. advocacy for comprehensive sector reform, Just
Transition, increased energy efficiency and decarbonisation
PUBLIC
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