World Bank Approves $89.7 Million in Projects to Boost Private Sector Competitiveness and Connectivity in Kosovo

Building on the achievements of TTFP 1, the Trade and Transport Facilitation Project 2.0 focuses on reducing trade costs and improving transport logistics.

The World Bank Board of Executive Directors has approved two new initiatives for Kosovo to enhance private sector competitiveness and improve regional connectivity. Together, the Financial Sector Development Project ($52 million) and the Trade and Transport Facilitation Project (TTFP) 2.0 ($37.7 million) will receive concessional financing through the International Development Association (IDA).

The Financial Sector Development Project focuses on strengthening financial stability and inclusion by:

• Enhancing the Deposit Insurance Fund of Kosovo to protect the savings of citizens and businesses.
• Supporting the Central Bank of Kosovo in modernizing digital payment systems for faster, secure transactions.
• Allocating funds to the Kosovo Credit Guarantee Fund to ease credit access for underserved micro, small, and medium enterprises (MSMEs), with an expected $200 million in private sector investment as a result.

The initiative also aids the Ministry of Finance, Labour, and Transfers in establishing a National Development Bank to fund projects aligned with Kosovo’s strategic development goals, including sustainable economic growth and employment generation.

Advancing Regional Trade and Transport Efficiency

Building on the achievements of TTFP 1, the Trade and Transport Facilitation Project 2.0 focuses on reducing trade costs and improving transport logistics. Key investments include:

• Developing e-tolling systems and related infrastructure on key transport routes such as Route 6, Route 7, and the Gjilan Motorway to streamline road use and revenue collection.
• Enhancing safety across Kosovo’s rail and road networks by upgrading 21 railway level crossings and addressing high-risk areas, including the 28-kilometer Fushe Kosove-Gjurgjice road section.
• Implementing advanced IT systems, hardware, and communications tools to expedite customs processing and foster smoother cross-border trade.

A Commitment to Sustainable Growth

Massimiliano Paolucci, World Bank Country Manager for Kosovo and North Macedonia, underscored the importance of the projects: “These initiatives showcase Kosovo’s dedication to strengthening competitiveness by empowering smaller firms and improving connectivity. This focus on financial inclusion and infrastructure will drive economic growth, job creation, and tangible benefits for Kosovo’s citizens.”

Addressing Broader Development Challenges

Kosovo faces significant development challenges, including fostering innovation, reducing trade barriers, and addressing infrastructure gaps. These projects aim to build resilience in the financial sector, attract foreign investments, and enhance Kosovo’s integration into regional and global markets.

By prioritizing private sector growth and transport efficiency, the initiatives contribute to Kosovo’s medium-term goals under its National Development Strategy and align with the World Bank Group’s Country Partnership Framework for the Western Balkans.

The combined impact of these projects is expected to accelerate economic growth, improve livelihoods, and position Kosovo as a more competitive player in regional trade.