Speaking after a cabinet meeting, Demo said 35 million euros would be used to upgrade basic local infrastructure, while the remaining 30 million euros would finance two key development programmes.

One programme will establish regional fleets of specialised maintenance vehicles to support municipalities in maintaining agricultural and urban infrastructure, he said.

The package also introduces a new model for urban public transport, under which selected municipalities will participate in a pilot programme in 2026 in cooperation with the Albanian Development Fund.

The initiative envisages the deployment of modern electric buses to improve public transport services, enhance urban quality of life and reduce costs for passengers, Demo said.

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The meeting focused on the role of local government in Albania’s European Union integration process, strengthening municipal capacities, and expanding cooperation between Albanian and Austrian municipalities.

Demo praised Austria’s experience in local governance, inter-municipal cooperation and the involvement of municipalities in European processes, describing it as a valuable model for Albania on its path toward EU membership.

Both sides also discussed ways to promote the exchange of best practices and deepen partnerships between local authorities in the two countries, particularly in the context of preparing Albanian municipalities for EU standards and governance frameworks.

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Speaking at a conference on the Municipal Performance Measurement System, an incentive-based policy aimed at strengthening public services, Huber said Switzerland had long supported Albania’s decentralisation and municipal capacity-building efforts.

“We remain a strong partner in this field. We are encouraged by the improving performance of municipalities, though the report also highlights challenges that must be addressed in the coming months,” Swiss Ambassador said.

Huber described the recently introduced performance-measurement system as an important tool that helps municipalities improve their work.

“This is a significant step toward the maturity and leadership of local government. It shows municipalities are ready to develop themselves, which is a cornerstone of decentralisation,” she said.

She added that the system of performance metrics and grants mirrors mechanisms used in the EU, where performance-based financing plays a key role in regional policy. “Albania is preparing even better for EU membership. Municipalities that actively engage and seek these grants are better positioned to access EU funds in the near future,” Huber said.

Decentralisation, she stressed, brings more delegated functions, greater autonomy and better services for citizens.

“Switzerland will continue to support Albania in this important transformation,” she added.

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The Minister of Finance Petrit Malaj said Tuesday that central government has increased to 1.6 billion lek its budget transfer to local government to settle arrears and improve public service delivery.

“We are supporting municipalities to improve public service delivery and to settle arrears,” Malaj said.

Under the 2025 state budget, government has projected a total of 89.8 billion lek or 898 million euros for the local government, recording an increase by 13.2% compared with 2024.

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Presenting the proposed 2025 state budget bill, Finance Minister underlined that local budget spending in 2025 accounts for 3.43% of the country’s GDP from 2.9% in 2024 and 2.3% in 2015.

Malaj underlined that fiscal decentralization and the increased autonomy of local government have yielded positive results in recent years.

“Local government revenue recorded significant increase to around 20 billion lek and we expect to surge by 3% in 2025.

The conditional transfer towards the local government in 2025 is projected to amount to 2.2 billion lek, with a total of 200 million lek earmarked for investment and reconstruction projects to improve safety of dams and water catchments.

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The state budget grants to local government account for 2.9% of Albania’s GDP in 2024, up from 2.3% in 2013.

The Unconditional Transfer towards the local government in 2024 is projected 12% higher or around 2.5 billion lek more than in 2023, and it is around 92% higher or 12.1 billion lek more than in 2015, a year before the territorial and administrative reform.

The Unconditional Transfer towards the local government in 2024 is estimated to total 24.3 billion lek and the amount will include 10.7 billion lek in unconditional sectoral transfer to new functions, as well as 1.5 billion lek for pay rise.

In 2024, the state budget grants to local government will total to 36.5 billion lek.

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“Deepening decentralization and further strengthening local government in serving the community and addressing the citizens’ needs according to the European standards is a significant priority for the Albanian government,” the State Minister Mazniku told the Local Government Forum on “Municipalities and European Integration Process” a day ago in Tirana.

The forum highlighted the best practices and the challenges facing Albania and the countries in the Southeast Europe.

The event was attended by the European Union Delegation representatives, government officials, mayors of cities across Albania, as well as representatives of the network of associations of local authorities of South East Europe.

The participants also widely discussed structural role of the municipalities and their associations in the European Union integration process, as well as the EU support for the local government by funding important development projects.

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The Deputy Interior Minister Romina Kuko and the Deputy Tourism Minister Ornela Çuçi also attended the meeting.

The news was announced by the Chairman of Tirana Regional Council Aldrin Dalipi, who thanked President of the European Committee of the Regions (CoR)’s Working Group (WG) on the Western Balkans, Nikola Dobroslaviç, also Chairman of Dubrovnik region, for his support during the online meeting focusing on involvement of Local and Regional Authorities in the EU accession process and Sustainable Recovery from the COVID-19 Crisis in Albania.

Deputy Interior Minister Romina Kuko was involved in the discussion on the European vision of local government in Albania and the post-pandemic recovery of the country’s economy and tourism sector.

During the meeting, EU and Albania officials also dwelled upon other important issues.

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