The WB, another USD 80 million loan is ready/ From the earthquake "tax" to energy, here's what's included

2024-04-29 09:35:00, Ekonomi CNA

The WB, another USD 80 million loan is ready/ From the earthquake

The Albanian government has requested another loan from the World Bank for an amount of 80 million dollars, which is expected to be approved at the end of this year under the name "Increasing Sustainability 2 and Green Development".

This loan envisages the government's support in some aspects of the legal framework for the new income tax law, the improvement of monitoring regarding tourism related to short-term rentals (AIR BNB or Booking) and the adoption of the law on mandatory earthquake insurance.

In the document published by the WB, it is stated that the main results in order to strengthen sustainability and to support green development in Albania, the objective of the development of the program is supported by a three-part theory that is reflected in the pillars of the operation.

This operation according to the WB strengthens the sustainability of the government sector and households by expanding the tax base, better managing the fiscal risk related to disasters (including climate change), increasing the climate resilience of public investments and increasing the effectiveness of the social assistance system.

The operation strengthens the energy market framework and increases renewable energy and energy efficiency by promoting an organized wholesale market and introducing energy efficiency in the public sector. The operation helps protect the environment and reduce the country's carbon footprint by preventing and reducing environmental degradation and reducing greenhouse gas emissions.

Concept description

Pillar 1 supports reforms aimed at strengthening the resilience of the government sector and households.

Under pillar 1, and in continuation of the reforms supported by DPL1, DPL2 (Development Policy Loan) supports two policy actions aimed at strengthening tax compliance and broadening the tax base.

First, DPL2 supports the adoption and implementation of bylaws from the new income tax law.

Second, DPL2 supports amending the Tourism Law, which expands the definition and government oversight of tourism activities, including short-term rentals. To better manage the fiscal risks associated with disasters, including climate change, DPL2 supports the adoption of the Compulsory Earthquake Insurance Law for residential properties. To increase budget sustainability, DPL2 supports the inclusion of climate mitigation and adaptation actions outlined in the climate strategy alongside climate-related performance indicators in the PBA.

Finally, to increase the effectiveness of the social assistance system, DPL2 aims to address the legal vacuum related to the lack of provisions that would enable the creation of the Social Fund at the LGU level.

Pillar 2 supports reforms aimed at strengthening the energy market framework and increasing renewable energy and energy efficiency.

Under Pillar 2, and in continuation of the reforms supported by DPL1, DPL2 supports the creation of the Renewable Energy Operator and the market and operating rules, as well as the regulatory package for consumers. This is expected to boost the development of the renewable energy market.

In addition, to further support energy trading through the organized wholesale market, DPL2 supports the adoption of a decree mandating energy trading through ALPEX. Finally, to introduce energy efficiency in the public sector, DPL2 supports the adoption of public procurement provisions that instruct public contracting authorities to ensure the implementation of energy efficiency standards in public procurement procedures.

Pillar 3 supports reforms aimed at protecting the environment and reducing the country's carbon footprint. Under pillar 3, to prevent and reduce environmental degradation, DPL2 supports the adoption of the Extended Producer Responsibility Law.

With the objective of reducing greenhouse gas emissions, DPL2 supports the introduction of a carbon tax on coal, as well as the adoption of the regulatory package for the implementation of the law on fluorinated gases./ Monitor.al