## IMF Reaches Staff-Level Agreement with the Republic of Kosovo on a Stand-By Arrangement (SBA) and a Resilience and Sustainability Facility (RSF) _IMF News, April 20, 2023_ ## Source details **Canonical URL:** [IMF Reaches Staff-Level Agreement with the Republic of Kosovo on a Stand-By Arrangement (SBA) and a Resilience and Sustainability Facility (RSF)](https://www.imf.org/en/news/articles/2023/04/20/pr23123-kosovo-imf-reaches-sla-on-sba-and-rsf) ## Other formats - [Markdown version](/en/news/articles/2023/04/20/pr23123-kosovo-imf-reaches-sla-on-sba-and-rsf/index.md) - [Structured JSON version](/en/news/articles/2023/04/20/pr23123-kosovo-imf-reaches-sla-on-sba-and-rsf/index.json) - [Bundle manifest](/en/news/articles/2023/04/20/pr23123-kosovo-imf-reaches-sla-on-sba-and-rsf/bundle-manifest.json) ## Bibliographic details - Published: April 20, 2023 --- ### Mission and process - An IMF mission led by Mr. Gabriel Di Bella visited Pristina during March 8-24; and held follow-up virtual and in-person meetings during March 27-April 14, to discuss macroeconomic policies, the energy sector, the reform agenda, climate change mitigation and adaptation policies, and possible IMF support. - Staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision. Executive Board discussions on these arrangements are expected late May. - The staff-level agreement is subject to approval by IMF Management and the Executive Board. ### Financing arrangements and purpose - 24-month Stand-By Arrangement (SBA) of around €100 million; expected to be precautionary and to provide liquidity in case downside risks materialize, including those arising from Russia’s ongoing war in Ukraine. - Resilience and Sustainability Facility (RSF) arrangement of about €78 million; the RSF will provide affordable financing to support climate change mitigation and adaptation, greener electricity production, and long-run growth prospects, and is expected to catalyze other climate financing. Kosovo’s RSF is the first in Europe. - Specific access figures: SDR 80 million (around €100 million, 97 percent of quota) for the SBA; SDR 62 million (around €78 million, 75 percent of quota) for the RSF. - The authorities indicated the intention to request an RSF augmentation once additional reform measures are identified, including from the upcoming Climate-PIMA (C-PIMA). ### Macroeconomic assessment and projections - Preliminary data suggests that real GDP grew by 3.5 percent in 2022 while inflation reached more than 11 percent. - Growth is projected to pick up to 4–5 percent in 2023 as commodity prices soften and fiscal policy becomes more supportive. - Softer commodity prices are projected to bring inflation down to 5 – 6 percent in 2023. - The moderate increase in growth is projected to close Kosovo’s relatively small output gap. ### Risks and scenarios - Downside risks predominately include: - An uptick in commodity prices, which could lead to lower growth and higher inflation (Kosovo is a net importer of food and energy). - Tighter financial conditions, including due to recent bank failures in the U.S. and Europe, which may weigh on banks’ asset quality and liquidity. - Program role: - The IMF-supported program will mitigate adverse impacts if these or other risks materialize. - Upside possibilities: - Stronger public investment implementation may push growth higher. - Exports of goods and services have proved very resilient and may again surprise on the upside. ### Key program elements and policy support - Fiscal Governance - Support to strengthen tax administration, reduce informality, enhance fiscal risk analysis, improve public financial management, and further strengthen fiscal transparency. - Financial Stability - Support to strengthen the CBK’s policy toolkit and governance guided by the 2019 Financial Sector Stability Review (FSSR) recommendations. - Structural Challenges - Support to close infrastructure and governance gaps, including through an update of the Public Investment Management Assessment (PIMA) and strengthening the operations of publicly-owned enterprises. - Energy and Climate Strategy - The RSF will support climate change mitigation and adaptation efforts, including those articulated by the recently approved energy strategy for 2023-32. - Concretely, support will target increasing the share of renewables in energy generation, decreasing pollution, strengthening regional energy integration, increasing energy efficiency, and protecting vulnerable energy consumers. - Expected catalytic effects - The new arrangements are also expected to catalyze additional bilateral and multilateral financial support and private investment in green energy. ### Engagement and next steps - The IMF team held meetings with senior government officials, representatives from the private sector, civil society, and development partners during the Pristina visit. - The team expressed gratitude to the Kosovo authorities for candid and constructive dialogue and warm hospitality and looks forward to continued engagement. *Press Release No. 23/123, IMF Communications Department (April 20, 2023).* --- ## Content in this bundle - **Press Release-English** - [Press Release-English (Markdown version)](/-/media/files/news/press-release/2023/pr23123-alb-imf-reaches-sla-with-the-republic-of-kosovo-on-sba-and-rsf.pdf.md){rel="alternate" type="text/markdown"} - [Press Release-English (PDF)](/-/media/files/news/press-release/2023/pr23123-alb-imf-reaches-sla-with-the-republic-of-kosovo-on-sba-and-rsf.pdf){rel="external" type="application/pdf"} --- ## References - [Republic of Kosovo and the IMF](http://www.imf.org/external/country/UVK/index.htm) - [IMF-World Bank Debt Sustainability Framework for Low-Income Countries -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/imf-world-bank-debt-sustainability-framework-for-low-income-countries) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2023/04/20/pr23123-kosovo-imf-reaches-sla-on-sba-and-rsf_