Bi-Modal Transport Solutions & Logistic Centers
Bi-Modal Transport Solutions & Logistic Centers
Business Model Description
Invest in integrated transportation and logistics centers including constructing, operating, and upgrading transportation hubs and terminals, and develop bi-modal transport solutions involving multiple modes of transport (road, rail, maritime), strategically located in key regions to act as hubs for warehousing, distribution, and value-added services; necessary funding may be provided by equity investments, or public-private partnerships (PPPs) and revenue can be generated by charging service-fees, rental income, and value-added services.
Expected Impact
Enhance trade efficiency, and stimulate economic development by integrating diverse transportation modes, optimizing supply chain operations, and promoting Albania as a regional logistics hub.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Albania: Durrës
- Albania: Tirana
- Albania: Elbasan
- Albania: Lezhë
Sector Classification
Transportation
Development need
The transportation sector constitutes the largest proportion of final energy consumption across all sectors, at 40%, and remains the most emission-intensive sector responsible for 60% of CO2 emissions, compared to the global average of 20%. The road, maritime and rail networks suffer from outdated equipment and lack of upgrades, resulting in low travel speeds, frequent disruption's and inefficient freight transport (1, 2).
Policy priority
National Strategy for Integration and European Integration (2022-30) acknowledges need for affordable transportations links to improve quality in life in remote areas, while the Government Program 2021-25 includes modernization of transport services among its key goals, providing grants up to EUR 5 million to enterprises in the transport sector (6, 7).
Gender inequalities and marginalization issues
Existing poor state of the transportation infrastructure hinders economic growth and private sector development in rural areas, directly impacting agricultural competitiveness & regional integration. Many people living in remote areas cannot easily meet their daily needs for health care/medicine, food and other basic supplies partly due to a lack of affordable transportation (3, 4, 6).
Investment opportunities introduction
Transportation falls under the strategic investments determined by the Law on Strategic Investments of 2015, providing incentives for investments between EUR 30-50 million (USD 32 - 53 million). Albanian Investment Development Agency lists road, rail, sea, and air transport as key investment opportunities due to the country's strategic location and connection to European corridors (6, 12, 13).
Key bottlenecks introduction
Alignment of national legislation with that of the EU for transport of goods and passengers, construction of necessary infrastructure for road and maritime transport and development of electric transport, observance of technical standards for transport safety, maintaining existing infrastructure, and development of intermodal capacities are cited as the key challenges facing the sector (6).
Land Transportation
Development need
The road and rail networks fall short of neighbouring European standards. Of the 18,000km road network, only 35% is paved, and 80% is in poor condition. The rail system lacks modern upgrades, like electrification and updated communication systems, causing slow travel, frequent disruptions, limited passenger services, and inefficient freight transport (2, 4, 5).
Policy priority
The Economic Reform Programme 2022-2024, includes electrification of key transport lines under its planned activities and lists the rehabilitation and construction of the Durres-TIA-Tirana railway as part of key reform measures. The Nationally Determined Contributions of the country includes key mitigation measures in the sector including increasing share of public transport for passengers and freight, and shifting road transport to other modalities including rail (8, 9).
Gender inequalities and marginalization issues
Women in rural areas, experience limited access to transportation, with direct implications on access to health, social services, and economic opportunities, partly due to gender stereotypes where vehicle operation is associated under male responsibility. Even in rural district women rely more heavily on public transportation, with 60% of bus passengers in Tirana being women (10, 11).
Investment opportunities introduction
Transportation infrastructure investments, including road and railway structures and exports of associated machinery and know-how are cited as key opportunities for foreign investors. The Economic Reform Programme 2023-2025 allocates ALL 0.43 billion (USD 4.3 million) to support public transport and ALL 120 million (USD 1.2 million) to urban transport sectors (14, 15).
Key bottlenecks introduction
Widening infrastructure gap, state ownership and governance and slow pace of sector reform, adopting a low carbon approach across the sector, road safety and environmental and social risks, and progress on electric mobility over long distances and associated infrastructure are among the key bottlenecks (2).
Road Transportation
Pipeline Opportunity
Bi-Modal Transport Solutions & Logistic Centers
Invest in integrated transportation and logistics centers including constructing, operating, and upgrading transportation hubs and terminals, and develop bi-modal transport solutions involving multiple modes of transport (road, rail, maritime), strategically located in key regions to act as hubs for warehousing, distribution, and value-added services; necessary funding may be provided by equity investments, or public-private partnerships (PPPs) and revenue can be generated by charging service-fees, rental income, and value-added services.
Business Case
Market Size and Environment
5% - 10%
Port of Durrës handled 93.9% of the sea freight, equivalent to 1.62 million tons, in 2023
The Port of Durrës is the main port in the country from which was transported 93.9% of the volumes of freights transported by sea or 1.62 million tons. The total volume of freights transported from the port of Durrës increased by 9.2% compared to the same period of the previous year in 2023 (19).
Indicative Return
5% - 10%
The feasibility study on a multimodal terminal in the Elbasan district estimated an IRR of 7.77%, over a period of 10 years (20).
Investment Timeframe
Long Term (10+ years)
The extension of the Durres port project, co-funded under the Western Balkans Initiative envisions a repayment period of 25 years, positioning road infrastructures in the long-term payback period (21).
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Market - Highly Regulated
Capital - Limited Investor Interest
Impact Case
Sustainable Development Need
Current logistics facilities in Albania remain subpar and require significant upgrades and connection to existing transportation and trade routes, to contribute to market connectivity, competitiveness and socio-economic growth. In the agribusiness sector, limited post harvest logistics covering warehousing and cold storage infrastructure are among the key constraints against the development of the sector, resulting in pre-consumption food losses (24, 39).
Albania's logistics performance index measuring trade and transport-related infrastructure was ranked at 2.7 in 2022, remaining below the EU average of 3.9, with the biggest challenges facing the sector listed as abundance of level A warehouses, the insufficient number of trained specialists, and the need for more innovation and technological advancements. (25, 26)
Despite significant investments, particularly for road infrastructure, the sector's contribution to economic development remains weak, with intermodal and combined transport and logistics requiring reinforcement to reduce logistics costs. Existing fragmented nature of production, namely in agriculture, further increases costs and complexity of logistics. (27, 28)
Gender & Marginalisation
Logistics remains a main problem facing producers in the agriculture sector, which employs 42.3% of women and 35.5% of men in rural regions, where inadequate coordination and availability of logistics in harvesting periods affecting performance and quality of products (28, 14).
On average, women make up only 23% of employment in the transport, storage, and communication sector across the Europe and Central Asia region, where women predominantly occupy lower-paying positions in administration, sales, catering, and cleaning, while men largely dominate engineering, driving, and managerial roles (29).
Expected Development Outcome
Improved logistics and transportation infrastructure will reduce overall cost of doing business in Albania, attracting foreign investments and contributing to economic growth.
Better logistics and transportation links will connect domestic and foreign producers to international and domestic markets, providing access to a wider customer-base, and boost exports and sales. (21)
Improved energy efficiency through intermodal transportation, which combines multiple modes of transport, such as rail, road, and sea, will help reduce the environmental impact of transportation in Albania
Gender & Marginalisation
Improved logistics and transportation can help reduce post-harvest losses and make it easier for farmers to get their products to market, leading to increased agricultural productivity and incomes for farmers, particularly in rural areas.
Expansion of gender inclusive logistics policies and enhanced operations, can help women's involvement in high-skilled positions including engineering and managerial roles.
Primary SDGs addressed
2.3.2 Average income of small-scale food producers, by sex and indigenous status
3,376 constant USD PPP, last measured in 2005 (29).
N/A
12.3.1 (a) Food loss index and (b) food waste index
Total food waste measured as 126.0715 kg per capita, or 363,201 tonnes in 2019 (30).
Reduction of biodegradable waste by 35%, compared to 2016 values (31).
9.1.2 Passenger and freight volumes, by mode of transport
Number of passengers 24,018 by rail, 862,757 by sea, 2,928,275 by air in 2021. The volume of goods transported by rail was 139,000 tons in 2023 (31).
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
Gender inequality and/or marginalization
Corporates
Outcome Risks
Heightened logistics activity has the potential to result in elevated emissions of greenhouse gases and CO2, consequently causing adverse environmental effects, unless energy-efficiency measures are deployed (33).
Unless appropriate mitigation measures are implemented, the construction and upgrading of new logistics facilities could lead to environmental degradation, including land degradation and marine pollution.
Impact Risks
Weak market linkages, inadequate skills among the workforce, or lack of coordination between different sectors, can limit the expected benefits of improved logistics and transportation services.
Deficiencies related to the connecting transport infrastructure including low speed of existing cargo trains or delays in border crossings may reduce competitiveness and positive impact.
Climate change induced extreme weather events including rising sea levels or heavy storms may impact transportation infrastructure and services, limiting operations of bi-modal transport or logistics centers.
Gender inequality and/or marginalization risk: Unless specifically targeted, the benefits of improved logistics and transportation may not reach marginalized groups such as women, minorities, or the disabled, potentially widening existing inequalities.
Impact Classification
What
Improved logistics and transportation infrastructure will reduce the cost of doing business in Albania, and boost trade activity by providing access domestic and international markets, particularly with the EU.
Who
Local producers particularly farmers will benefit from enhanced connectivity to trade routes, consumers will gain access to diverse and quality products.
Risk
Weak market linkages, concentration of activity in urban districts, deficiencies related to the connecting infrastructure and climate change induced extreme weather events can impede impact.
Contribution
In addition to the ongoing EU integration, and the expansion of the core Ten-T network, investment will help optimize the country's strategic location and link local producers to international value chains.
How Much
Expansion of logistics services can serve arriving freight volumes to the country, which reached 1.62 million tons in 2023 (19).
Impact Thesis
Enhance trade efficiency, and stimulate economic development by integrating diverse transportation modes, optimizing supply chain operations, and promoting Albania as a regional logistics hub.
Enabling Environment
Policy Environment
Sectorial Strategy of Transport & Action Plan 2016 – 2020: includes the goal to reinforce the creation of an efficient and integrated transport system through inter-modalities, also encompassing reducing logistics costs and creating favorable conditions for the intermodal and combined transport and logistics (27).
National Strategy for Development and European Integration 2022-2030, 2023: includes the policy to promote and create favorable conditions for the development of intermodal and combined transport and related logistics for multimodal transport (6).
Economic Reform Programme 2022-2024: Promotion of multimodal transport solutions and modal shift, and reducing transport related pollution are among the key targets for brining the transport network up to EU standards, and building fast and efficient transport links within the region (7).
Financial Environment
Financial incentives: The Medium-Term Budget Programme, featured in the Economic Reform Programme (2023-2025) features investments for the ports of Durrës and Vlora and the Airports of Vlora and Saranda, where the new railway lines Tirana-Durrës and Tirana-Rinas are already budgeted (1.7 billion ALL - USD 17.43 million) (15).
Fiscal incentives: Incentives provided in the industrial and logistics sector varies from EUR 5 million to EUR 50 million (USD 5.33 - 53.34 million) in the technology development sector, and from EUR 30 million to EUR 50 million (USD 32 - 53.34 million) in the transport sector. Investments worth EUR 100 million (USD 106.7 million) enjoy incentives in any type of industrial sector (37).
Other incentives: Western Balkans Investment Framework, under the EU Commission, provided a grant of EUR 27.7 million (USD 29.57 million), co-financed by the EBRD through a EUR 25 million (USD 16.7 million) loan, for the reconstruction of the port of Durres, to establish a multimodal transport link connection Kosovo and Macedonia (21).
Regulatory Environment
Law No 8308 "On Road Transport", 1998, amended 2020: regulates the conditions for admission to the activity of national and international transport operator of goods and passengers (34).
Law No 142/2016, The Railway Code of the Republic of Albania, 2018: aligns the operation of railways with EU codes, including certification of drivers, railway safety, and interoperability within the EU (27).
Law no.8/2018, On the ratification of the Transport Community Treaty: aims to create a Transport Community in the field of road, rail, inland waterway and maritime transport as well as the development of the transport network between the European Union and the South East European Parties (35).
Law no. 55/2015 On Strategic Investments, 2016: aims to increase Albanian and foreign strategic investments in the sectors of the economy considered as strategic sectors, through the establishment of special favorable administrative procedures, mitigating and support services to the investors (36).
Law no. 125/2013 On Concessions and Public Private Partnership, April 2013 (amended 2019): abolishes the 2006 Law no. 9663 on Concessions, provides that changes in the ownership or the management of the Special Purpose Vehicle (SPV) are subject to the approval of the contracting authority and the Ministry of Finance, unless such changes are due to trading of shares in a regulated capital market (40).
Marketplace Participants
Private Sector
Balfin Group, Albstar Ltd., Rejsi Farma, Durres Port Authority, Pelikan Transport Albania, A-Logistics Company Shpk, Balkan Trans Albania, HSH Albanian Railways S.A., Albanian Cargo Logistics.
Government
Ministry of Infrastructure and Energy, Ministry of Economy, Culture, and Innovation, Ministry of Agriculture and Rural Development, Ministry of Environment and Tourism, Institute of Statistics of Albania (INSTAT), Albanian Investment Development Agency (AIDA), Regional Councils, National Agency of Territory Planning.
Multilaterals
European Bank for Reconstruction and Development (EBRD), European Union – Delegation to Albania, World Bank Group, Western Balkans Investment Framework, International Bank for Reconstruction and Development (IRBD), United Nations Conference on Trade and Development (UNCTAD), United Nations Economic Commission for Europe (UNECE), United Nations Framework Convention on Climate Change (UNFCCC).
International Association of Ports and Harbors (IAPH), South East Europe Transport Observatory (SEETO), Foreign Investors Association of Albania (FIAA), Albanian Development Fund, Environmental and Rural Development Institute (ERDI).
Target Locations
Albania: Durrës
Albania: Tirana
Albania: Elbasan
Albania: Lezhë
References
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