Mijacic: The first payment to Kosovo from the Growth Plan must wait for parliament formation

Dragisa Mijacic, Coordinator of the Working Group of the National Convention on the EU for Chapter 35, tells Kosovo Online that the first payment of funds from the European Growth Plan for the Western Balkans has been postponed to the first half of 2025 and that this initial payment, acting as a form of advance funding, is not conditional on reforms that recipients in the region must implement. However, as he says, it does require the signing of loan and credit agreements, which must be ratified by parliaments, meaning that in Kosovo’s case, the payment will have to wait until the parliament is formed.

"This means that Kosovo’s payment will initially be delayed slightly longer than in other cases. However, I don’t believe there will be any issues with the ratification of the agreement. This is a significant amount of money, coming either as a grant or a loan, designated for development projects. The very fact that Kosovo will receive funds from the European Union is important both for the ruling party and for those who were previously in opposition. I don’t expect problems with the ratification process, but the question remains when it will happen, which depends on when the Kosovo parliament is formed," Mijacic stated.

Although the EU initially expected the first payments to be made by the end of 2024, Mijacic pointed out that the Growth Plan is a complex and new mechanism, and delays often occur with newly introduced financial instruments.

"This is a new instrument that requires specific steps from each Western Balkan economy to qualify for funding. The reform agenda has been structured so that all recipients must meet certain conditions outlined in the reform plan. Funds will be disbursed based on these benchmarks, which are assessed every six months. The first review will take place in mid-2024, followed by another at the end of the year, and so on. The first payment, amounting to about 7% of the total allocated funds, is given in advance and is not conditional, whereas all subsequent tranches will be subject to conditions," Mijacic explained.

The conditions, he added, are outlined in publicly available reform agendas. Additionally, for Serbia and Kosovo, there is a specific requirement related to the implementation of the Agreement on the Path to Normalization and the Ohrid Annex, as well as all prior agreements.

"Peter Sorensen will be the first to assess these matters, but the final decision on compliance will be made by the European External Action Service, specifically Kaja Kallas. Once they determine that Serbia and Kosovo have met the requirements, the next tranche of funds will be disbursed," Mijacic stated.

Regarding the projects Kosovo will finance with Growth Plan funds, he noted that they are already being planned under another instrument – the Western Balkans Investment Framework (WBIF).

"These include railway infrastructure projects, such as the Pristina-Merdare highway, as well as initiatives focused on energy efficiency, the green economy, and private sector development. I believe the exact project specifications have not yet been made public, but they will certainly include energy diversification, the green agenda, private sector growth, strategic infrastructure, and likely some projects related to social infrastructure," Mijacic concluded.