Kosovo

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Office for South East Europe European Commission / The World Bank

Note on Donor Assistance to Kosovo as of December 31, 2002

June 2003

I. Summary

The European Commission / World Bank Joint Office has prepared updated financial summary tables on the status of donor pledges ¹ to Kosovo ² as of December 31, 2002 based on a new set of reports by donors. Thirty donors have reported to the Joint Office as contributing to the reconstruction and development of Kosovo.

This reporting on donor pledges to Kosovo has been done on an annual basis from the Joint Office to follow-up on four donors meetings held since July 1999, the latest in November 2002.

The donor aid data from the Joint Office donor database complements the reports on donor assistance produced by the Ministry of Finance and Economy based on local project information.

The main conclusions and overall results are as follows:

• By the end of 2003, donor commitments will have met the target set out in the Reconstruction and Recovery Program.

• Donor commitments for budgetary support, reconstruction and recovery assistance and peace implementation activities from 1999-2002 total €2.3 billion. An additional €214 million is expected to be committed in 2003. Together, firm and expected commitments from 1999-2003 are €2.5 billion.

• €1.92 billion is reported as being contracted. This is 92% of the commitments made for reconstruction and recovery assistance (i.e. excluding budgetary support)

• €1.92 billion or 82% of total donor commitments made by the end of 2002 were spent.

• €352 million were reported as being spent in 2002 alone for reconstruction and peace implementation activities. Together with budgetary support, donors spent €367 million for Kosovo in 2002.

Table 1: Summary of Total Donor Assistance from 1999-2002 in € millions

Figure 1 shows the increase of donor commitments and expenditure since December 1999.

II Sources of Funds for Kosovo 1999-2002 - Donor contributions (Annexed Tables 1 and 2)

The table below gives an overview of the overall sources of funds, split between Financial Institutions (EBRD, World Bank, Council of Europe Development Bank, Islamic Development Bank), bilateral donors, and the European Community. Bilateral donors and the European Commission have taken a lead role in supporting Kosovo's reconstruction and recovery. The EC and EU Member States provide about two-thirds of the assistance to Kosovo. The European Commission alone accounts for about 40% of the total. The US is the second largest single donor, contributing about 15%. Non EU Member States, including Japan and Switzerland, have also substantially contributed to the reconstruction effort. While financial support from IFIs to Kosovo has been considerably constrained by their limited ability to provide grant funds, they have actively supported the reconstruction efforts through support of the private sector, and extensive analytical work and policy advice together with the IMF.

Table 2: Sources of Funds for Kosovo 1999-2002 by commitments in €

III. Sector Allocations (Annexed Tables 3-6)

As shown in Chart 1, donors allocated about 84% of their commitments to support reconstruction and economic recovery, some 11% for critical budget support, and about 5% for peace implementation activities. Chart 2 shows that half of the amount allocated for reconstruction and recovery was committed to support three objectives: rehabilitation of utilities, especially in the energy sector; reconstruction of damaged houses; and development of the private sector. The utilities sectors (energy, solid waste and water) received €544 million, or some 28% of donor commitments for reconstruction activities. Energy alone, funded mainly by the European Commission, accounted for €418 million, or about 18%. Almost one-fifth of the funds were committed for institutional development. Finally, about 12% of donor support has gone towards the education sector and improving health care services.

Attachments: (pdf, 403 KB)

Table No. 1   Kosovo: Results by Donor in USD
Table No. 2   Kosovo: Results by Donor in Euro
Table No. 3   Kosovo: Results by original Sectors in USD
Table No. 4   Kosovo: Results by original Sectors in Euro
Table No. 5   Kosovo: Results by PRIP Sectors in USD
Table No. 6   Kosovo: Results by PRIP Sectors in Euro