Almost half of the loans from the International Bank for Reconstruction and Development’s Municipal Services Improvement Project (MSIP) was used for energy efficiency projects, rehabilitation of buildings and waste management.
The World Bank said the Board of Executive Directors approved EUR 25 million for the Second Municipal Services Improvement Project (MSIP2). The project aims to improve transparency, financial sustainability, and inclusive delivery of municipal services across the country. MSIP2 will provide sub-loans to municipalities for infrastructure investments such as water supply, sewerage, solid waste management, local roads, energy efficiency improvements to municipal buildings, and other high priority municipal infrastructure investments with clear impact on welfare of citizens and efficiency of services. The project will also introduce a grant component to enhance service delivery and infrastructure for poorer and marginalized communities.
Fifty seven of the country’s eighty municipalities have chosen to participate in the first round and are implementing or have already completed priority infrastructure projects. Of these, 36% have been for street rehabilitation, 13% for water supply, 13% for rehabilitation of municipal buildings, 13% for energy efficiency improvements, 12% for solid waste management, and 13% for procurement of communal service vehicles or other priorities.
“The Second Municipal Services Improvement Project will continue to link investments in priority infrastructure with greater government transparency and accountability and strong citizen engagement at the local level,” said Ellen Goldstein, World Bank’s country director for South East Europe. “Going forward, we want to encourage all municipalities in FYR Macedonia to participate in the project, and to address poverty and exclusion by investing more in their poorer communities.”
The municipal investment sub-loans of EUR 18.5 million will provide financing to municipalities for investments in high priority local infrastructure. The poverty and social inclusion grants of EUR 4.9 million will provide investment to municipalities as an incentive for them to invest in infrastructure improvements in poorer and marginalized communities. The component for project management, monitoring and evaluation, and capacity building worth EUR 1.5 million will be used for support and to help ministries and agencies at the national and municipal levels to strengthen institutional and financial systems for sustainable service delivery.
The first MSIP loan of EUR 18.9 million was followed by two additional financings. The first additional financing of EUR 37.2 million was provided by the World Bank in 2012. The second, of EUR 15.5 million, was recently approved by the European Union with financing from the Instrument for Pre-Accession (IPA) specifically to support rural investment. MSIP2 is financed from a World Bank loan of EUR 25 million with a final maturity of 18 years including a grace period of five years. Total maturity of municipal sub-loans will not exceed thirteen years, including up to three years of grace period. All municipalities are eligible and encouraged to participate.
In view of the electoral cycle in Macedonia, the MSIP2 project will become effective and disbursements will begin only after upcoming parliamentary elections are completed.