Project ID: 1129
Executive Board Document: EB-99-68-R-27-Rev-1

Mountain Areas Development Programme

Farm families in the mountainous areas of Albania are highly vulnerable in terms of food security and nutrition. The recent crisis in Kosovo has added to the strain on the family economy and the infrastructure system; in the programme area, private households are hosting almost 300 000 refugees. The overall goal of this IFAD-initiated programme is to raise the standard of living of poor people living in mountain areas. It will promote and support increased agricultural production and productivity, better household food security and nutrition, increased incomes from agricultural and related rural enterprises and improved infrastructure. The programme will build upon, consolidate and extend the achievements of the first two IFAD-financed projects in Albania. The first phase of the programme, which will be implemented over a six-year period, seeks to accomplish the following goals:

- establish an agency for mountain-area development capable of elaborating a resource-efficient development programme and providing effective technical,for its realization;

- establish a sustainable financial institution that can provide financial services to rural mountain-area clients;

- ensure sustainable and equitable use of irrigation water - a vital commodity in the livelihood of farmers;

- allow farmers full benefit from programme-rehabilitated irrigation schemes by supporting increased crop production and diversification into higher-value crops;

- improve food security and livestock development based on increased feed supply and improved animal health; and

- facilitate market-oriented agriculture and improve standards of living by alleviating small infrastructure bottlenecks through construction or rebuilding of roads and village water supplies.

Seven poor mountain districts - five in the south and two in the north-central part of the country - with a total population of 365 000 persons (89 000 families) are targeted in the programme's first phase. Fourteen districts will have been covered by the end of the programme. Farm families owning less than 2.5 ha of arable land, of which not more than 0.75 ha can be irrigated, will be part of the programme's priority target group.

Innovative Features:

The programme will set up the Mountain Areas Development Agency as a sustainable, market-oriented centre of excellence. The agency will have a number of beneficial features, including:

- a programmatic approach designed to foster a continuing, coherent and timely response to clients and to encourage their full participation in determining its activities;

- a decentralized structure and system for outsourcing; and

- an emphasis, in conjunction with the Mountain Areas Finance Fund, on sustainable individual and association-based private enterprise and local empowerment and capacity-building.

This programme will also establish a model for the provision of services to disadvantaged areas in transitional economies.

Loan Amount:

SDR 9.6 million (approximately USD 13.2 million) on highly concessional terms.

Total Programme Costs:

Estimated at USD 23.2 million, of which a grant of USD 440 000 will be provided by IFAD, USD 390 000 will be (tentatively) provided by The Netherlands Development Organization, USD 4.2 million by other cofinanciers still to be identified, USD 716 500 by a national financial institution, USD 2.9 million by the Government and USD 1.2 million by the beneficiaries.

Cooperating Institution:

UNOPS.