Programme area. The programme will be implemented in the four northernmost regionsof Albania - Diber, Kukes, Lezhe and Shkode - considered to be the country's most disadvantaged areas.

Target group. The primary target group will be rural people living in absolute or extreme poverty who are actually or potentially economically active. The secondary target group will be rural on- and off-farm enterprises engaged in commodity and service value chains with strong backward linkages to primary target group members

Programme objectives. The programme's overall goal is to increase the incomes of the poorest households in the programme area. Its specific objective is to improve rural smallholders' opportunities for employment and participation in competitive rural supply chains by increasing their access to finance, markets and technical know-how.

Programme description. In addition to programme management, the programme is expected to have two components:

• Rural market development. This will be achieved through: (i) a rural market intelligence and investment strategy to guide investment in commercially viable and hence sustainable rural on- and off-farm enterprises benefiting the rural poor. To this end, a market opportunities assessment will be undertaken to be used as the basis for producing strategic investment programmes (SIPs) for commodities or non-farm business activities with high commercial potential. In addition, rural business service providers will receive initial orientation and training in SIP approaches and provisions; (ii) strategic investment in market entities, through specifically tailored matching grants that will allow target groups to participate in SIP-related investments and consequently to access programme benefits; and (iii) commercial rural environmental services, with the aim of creating a commercial platform for investments to restore environmentally damaged mountain areas, many of which have severely degraded forests and other vegetation cover. A study will be undertaken to ascertain the status of and opportunities for providing commercial environmental services in the poorer, mountainous parts of the programme area. Poor rural inhabitants are expected to implement three or four pilot activities.
• Market linkage infrastructure. The programme will award competitive contributory grants for investments in public infrastructure and natural resource management. These grants will depend on and complement investments made under the first component. It is envisaged that grants will mainly be used for constructing  small rural roads, developing livestock watering points, setting up waste management systems and rehabilitating small-scale gravity-operated irrigation schemes.

Important features. The programme is consistent with Albania's draft National Strategy for Development and Integration. IFAD's strategy in Albania over the last 12 years has been to provide a basis for promoting both sustainable increases in economic activity in the disadvantaged mountain areas and the closer integration of these areas into the national economy. Reflecting lessons learned from previous IFAD investments, and in line with IFAD's 2005 country strategic opportunity paper, the programme will make investments designed to assist poor people in mountain areas who are already engaging in economically viable income-generating activities or who are interested in doing so in the future. The programme's main innovation will be to transform the Mountain Areas Development Agency (MADA) - which was conceived in 1999 in the context of the IFAD-designed and financed Mountain Areas Development Programme (MADP) - into Albania's National Agency for Regional Development. This will give MADA a role and responsibilities commensurate with those of a European Union regional development agency. The support to be provided to MADA through this programme represents a major scaling-up of IFAD activities in the area and will complete the innovative process initiated under MADP. Other innovations will include a grant programme for start-ups and vocational training activities linked to the SIPs.

Potential cofinanciers. Complementary funding is expected from the European Union in the form of pre-accession funds.

Facts and figures Region: Near East and North Africa Programme ID number: 1452 Nature of programme: Rural development Programme cost (provisional): US$18.0 million Estimated IFAD financing (provisional): Up to US$9.5 million Cofinancing gap: See section on potential cofinanciers Domestic contribution: To be determined Proposed terms: Intermediate Stage of programme cycle: Under detailed programme design Next step in programme development: Programme design completion scheduled for April/May 2008. Final design meeting with stakeholders scheduled for early May 2008. Tentative date for consideration by the Executive Board: September 2008 Programme duration: Five years Tentative programme start-up date: 2009 Implementing agency: Mountain Areas Development Agency Borrower: Republic of Albania Hot links Rural poverty in Albania IFAD operations in Albania Planned project activities disclaimer Contact information Ms M. Bishay Director, Near East and North Africa Division Mr H. Pedersen e-mail: h.pedersen@ifad.org International Fund for Agricultural Development (IFAD) Via Paolo di Dono, 44, 00142 Rome, Italy Tel: + 39 0654591 e-mail: ifad@ifad.org