European Commission Welcomes Political Agreement On The €6B Reform And Growth Facility For The Western Balkans

The Facility will provide increased financial assistance in exchange for socio-economic and fundamental reforms defined in ambitious Reform Agendas being prepared by the Western Balkan partners.

The overall amount of the Facility for the period 2024-2027 is €6 billion. This amount is composed of €2 billion in grants and €4 billion in highly concessional loans. At least half of the overall envelope will be allocated through the Western Balkans Investment Framework (WBIF), supporting infrastructure investments and connectivity, including transport, energy, green and digital transitions. The remaining part will be released as direct support to the national budgets.

Funds will be released twice a year, based on requests by the Western Balkan partners and following verification by the Commission and, where appropriate the EEAS, that all relevant conditions have been met. These conditions include payment conditions corresponding to qualitative and quantitative steps measuring progress and implementation results that have been agreed in the Reform Agendas, as well as general conditions related to macro-financial stability, sound public financial management, transparency, and oversight of the budget.

In case some conditions are not met, the Commission may suspend payments in part or in full depending on the condition. Following such a suspension and in case that Western Balkan partners do not fulfil the related conditions during a grace period of one year (or two years in the first year of implementation), the suspended amount will be withdrawn and may be redistributed among other beneficiaries in the subsequent years.

To finance the loan support, the European Union will raise €4 billion on the financial market until the end of 2027. The €2 billion of non-repayable support will be financed through additional resources from the Mid-Term revision of the Multiannual Financial Framework (MFF).

Next Steps

The political agreement reached is now subject to formal approval by the European Parliament and the Council. The Regulation of the Reform and Growth Facility for the Western Balkans will enter into force the day after its publication in the Official Journal.

Background

The Reform and Growth Facility for the Western Balkans is the financial instrument supporting the Growth Plan for the Western Balkans, adopted in November 2023. The Growth Plan is a new instrument to accelerate the Western Balkans' preparations for EU membership by bringing forward some of its benefits ahead of accession with direct impact for citizens and businesses. This in turn should significantly accelerate the speed of the enlargement process and the growth of their economies. The Facility is complementary to EU assistance already provided through the Instrument for Pre-accession Assistance (IPA).