Local infrastructure across the Western Balkans suffers from a significant backlog of investments. This is due to a significant funding shortfall faced by municipalities in the region. Given the region is expected to join the European Union, this situation is not tenable.
Against this background, the European Bank for Reconstruction and Development (EBRD) and the German KfW Group established with the support of SECO the Municipal Infrastructure Development Fund (MIDF) in order to provide the long term funding needed for infrastructure in-vestments, help closing the funding gap, and promote long-term sustainability in municipal services.
MIDF co-operates with carefully selected local commercial banks in the region to expand access to funding sources. MIDF co-finances municipal infrastructure projects with the participating banks by sharing lending risks and/or providing liquidity.
MIDF supports the construction of new infrastructure, or the rehabilitation or improvement of existing infrastructure, including, but not limited to the fields of:
- water supply and treatment
- waste management and recycling
- energy and heat supply
- public transport and traffic infrastructure
- buildings and energy efficiency
The beneficiaries of MIDF’s investments include:
- municipal and regional governments
- municipality-owned entities or companies
- other public institutions owning or operating municipal infrastructure
- private sector operators involved in the provision of municipal services
MIDF supports local banks in developing sound financing structures for municipal infrastructure investments. This includes the establishment of systems and methodologies for risk assessment, the drafting of financial document templates, social and environmental due diligence preparation, and procurement and concession monitoring.
In addition, MIDF supports its beneficiaries in increasing their capacity throughout the project development and implementation cycle. This includes the preparation of feasibility studies, project designs, tender documents, procurement and concession reviews, and project monitoring.