Foreign Direct Investments to Albania Down 13% in 2020

Foreign Direct Investments to Albania Down 13% in 2020

TIRANA, March 29

Foreign Direct Investments (FDI) to Albania in 2020 were down 13 percent to an estimated Euro 933 million, according to data issued by the Bank of Albania (BoA).
However, BoA says that the contraction in FDI flows was moderate despite the global health crisis. The Trans Adriatic Pipeline (TAP) project helped to keep FDI flows afloat even though, the project reached its final phase in 2020.
Based on the data provided by BoA, the energy sector that included power, gas, and water supply accounted for 28 percent of total FDI flows. Regardless of that, FDI flows to the energy sector dropped by 22.4 percent compared to 2019.
Further on, the extractive industry was the worst performer in terms of FDI flows. The sector received an estimated Euro 134 million in foreign investments, down 48 percent compared to the previous year.

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The FDI flow drop in the extractive industry sector allowed the Finance and Insurance Activities to jump on the second place in terms of foreign investments. The sector received an estimated Euro 134 in FDI or 15 percent more compared to 2019.

In the meantime, FDI flows to the real investment sectors saw a significant decline by 26 percent in 2020.
Meanwhile, investments in the Information and Communication sector in 2020 were estimated at Euro 42 million. The ICT industry saw growth in 2020, yet it remains last in the list of the sectors with the highest FDI flow.

In terms of future forecasts, BoA considers 2021 a challenging year regarding FDI flows.
The conclusion of the TAP project and the hydropower plants on Devolli River that poured an estimated Euro 2 billion in FDI, would cause a considerable gap. Moreover, the impact of the coronavirus pandemic will have an impact on foreign investment plans during the ongoing year.

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Source: BoA, Monitor

Photo: First offshore pipelines in Albania successfully pulled ashore, March 2019, credit: TAP-AG

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