Where Kosovo borrowed in last year and what is the value of loans

The Kosovo State Debt portfolio was established in 2009. Kosovo's State Debt included International Debt, Internal Debt, as well as State Guarantees. From 2009 to 2011, Kosovo's debt portfolio consisted of only international loans, writes Periscope.

 At the end of 2021, the overall debt reached a value of 1,682.89 billion euros, which compared to the preceding year marked an increase of about 13.12%. The increase is due to emissions in the amount of 123.23m euros during 2021 (of which 60 million euros are budgetary support) as well as new releases of the valuables under the Internal Debt in the amount of 144.25m euros.

According to the Ministry of Finance data, during the year 2021 withdrawals in higher sums have been realised by the EU, ANZh, BZhK and BERZh. The International Debt at the end of 2021 marked 576.75m euros, which represents about 34.27% of total state debt or 7.86% of BPV.

Most or about 65% of the International Debt portfolio is to ANZh, BNRZh and the EU.

New International Loan 2021

Five signed loan/finance agreements have been ratified during 2021

During 2020 and 2021, between the Government of Kosovo and the creditors, which are:

A World Bank Agreement ( ANZh);

A deal with the European Bank for Reconstruction and Development ( BERZh);

Two agreements with the European Investment Bank (BEI);

A deal with the Council of Europe Development Bank ( BZZKE).

Also in 2021, six new loans have been negotiated and signed.

The contracting of new financial agreements in 2021 has been carried out in order to finance projects in the water infrastructure sector, for managing the Devov-19 pandemic, reforming the social schemes system.

Agreements and their goal:

1. Through the loan financial agreement between the Republic of Kosovo and BZKA, Amanda No. 1 ) The Public Sector Funding Tool for Emergency Response to David-19, totaling 25.00 million Euros in its efforts to provide medical services to those affected by the Tyvid-19 virus and help manage the pandemic.
2. Kosovo's Financial Agreement for Response Credit on COVID19 for NMV with the EU aims to offer the necessary capital to the Kosovar Fund for Creday Guarantee, so that the same can offer credit guarantees to financial mediators to cover losses that could be caused by financial mediators according to investment loans or capital loans made available for available capital workers NVMs.
3. The financial agreement for a loan to the Covisvar-19 Emergency Project for Kosovo ʹ Financing Enlargement with ANZH is aimed at prevention, detection and response to the threat posed by the Deved-19 pandemic and strengthening national systems for preparing public health in Kosovo.
4. The Financial Agreement Project of the Reform of the Social Assistance System in Kosovo with ANZH aims to improve the equality and adaptability of Kosovo's social security network.
5. The financial agreement on the Impianti loan for the management of Zeza waters in Mitrovica with the EU is aimed at eliminating all waste water generated in the urban area of Mitrovica district, and dealing with these contaminated waters according to standards set out in the Urban Water Treatment Guide 91/271/ EEC.
6. The financial agreement on the Impianti loan for the management of Zeza waters in Mitrovica with the BERZh aims to realise the rehabilitation and expansion of the sewage network in the Mitrovica municipality and the Wushtrri municipality, as well as the connection of neighbouring communities.

International debt according to sectors

The loans, which were contracted during 2021, belong to the health sector 25%, social well-being 30%, the 20% water infrastructure sector and financial support 25%, as can be seen on board No. 5a. Projects which are financed through international debt are projects which are initially approved by the National Investment Committee and are part of the medium-term Framework of spending and the Annual Budget.

During 2021, the Business Organizations, which finance projects from the International Debt, have continued to draw funds from loans. At lesser value, public companies have continued to draw funds from sub-committed loans from the Ministry of Finance, Labour and Transfers.

International Debt Service

During 2021 the International Debt service paid for $89.20 million, which represents 3.59% of the 2021 budget revenues. About 59% of the amount paid is to the IMF, while about 18% is the debt service to BNRZh, and 22% to other creditors.

International debt portfolio according to type of currency

The International Debt portfolio currently consists of three foreign currency: SDR1, SAR and USD. (The SDR is a coinpot made up of coins as follows: E Wow, USD, GBP, JPY and CNY. The value of the SDR is determined on the basis of an average which is attracted by the value of the above mentioned coins. This basket is revised every five years by the IMF Executive Board. With the review taken in November 2015, the Board has decided to include the Chinese reminbi as the fifth currency of the basket on October 1, 2016).

At the end of 2021, about 16% or 92.03 million Euros of the International Debt portfolio are owed in SDR2, USD and SAR currency. The SDR currency debt is loaned by the IMF and ANZh, while the debt in SAR currency is borrowed from FSZh, the debt in the USD currency is borrowed from FOZHN, while the remaining 84% is loaned to the Euro currency from other creditors.

Internal Debt Status

The Republic of Kosovo has begun issuing its Value Letters from January 2012. Market development has proved to be very successful in terms of investor interest and the cost of borrowing by what kind of borrowing has contributed as the main catalyst in financing the budget deficit.

In 2021, Internal Debt is 1,106.14 billion euros, representing about 66% of total state debt or 15% of BPV. The relative increases of domestic debt year-on-year are: 20% in 2017, 18% in 2018, 17% in 2019, 21% in 2020, and 15% in 2021.

State guarantees status

At the end of 2021 the portfolio of state guarantees of the Republic of Kosovo

It's made of two state guarantees labeled. In 2014, the Ministry of Finance issued the first state guarantee of 10 million Euros, with which it guaranteed F. The SDK for the credit line offered by the EBRD. This credit line has served to raise the value of deposits secured from 2,000 to 3,000 euros per deposit. This state guarantee has expired on December 19th 2020.

The second international guarantee, however, has been issued during 2016, through which the local public company Urban traffic is guaranteed for the credit offered by the EURZh at the value of 10m euros. It is noteworthy that this loan is guaranteed under Kosovo institutions initially, from the Municipal Assembly in Pristina. The advance of Pristina's Urban Traffic is in advance.

The loan was disbursed overall in 2018 and is starting to return in the same year. By the end of 2021, the borrower has returned the loan to an estimated 3.37 million euros.

At the end of 2016, the Republic of Kosovo has issued its third state guarantee in the amount of 24m euros, which has been made available to F. The SDK for the second credit line offered by the BERZh. This credit line represents the continuation of the first credit line that was made available in 2013 for adequate coverage of depositors provided proportionally with gradual growth defined by a covering limit law for each depositor. /Periscopi/