The Reform and Growth Facility (RGF) for the Western Balkans Six (WB6) is a EUR 6 billion EU instrument designed to support the implementation of structural reforms and investment priorities in each country. The Facility provides EUR 2 billion in grants and EUR 4 billion in concessional loans over the period 2024–2027. It forms the financial arm of the EU’s Growth Plan for the Western Balkans and is directly tied to each country’s implementation of a national Reform Agenda.
Structure of Financing
Total funding under the RGF is set at EUR 6 billion, of which EUR 2 billion is distributed as grants and EUR 4 billion as loans. These funds are allocated across the six WB countries based on a distribution formula laid out in the annexe of the Facility’s founding regulation, which considers population size, needs, and implementation capacity.
At least 50% of the total funding (both grants and loans) is earmarked for investments and will be channelled through the Western Balkans Investment Framework (WBIF). The remainder of the loan envelope will be provided directly to the beneficiaries’ national treasuries as budget support to be used in line with the agreed reform and investment priorities.
Allocation Methodology and Adjustments
The allocation of EU funds under the RGF to each Western Balkan beneficiary is determined in the annexe to the Facility regulation. Each country’s allocated funds are based on a formula that considers both population size and GDP per capita in relation to the regional average.
Importantly, these allocations are provisional and may be adjusted based on reform performance. Final disbursements are tied to the successful implementation of country-specific Reform Agendas. If a beneficiary fails to meet preconditions, general conditions, or payment benchmarks, the European Commission may reduce or reallocate that country’s funds to better-performing partners.
| Country | Indicative Percentual Allocation | Indicative Allocation (EUR million) | Provisioning for Loans (EUR million) |
| Albania | 16.40% | 922.1 | 59.2 |
| Bosnia & Herzegovina | 19.30% | 1,085.10 | 69.6 |
| Kosovo | 15.70% | 882.6 | 56.6 |
| Montenegro | 6.80% | 383.5 | 24.6 |
| North Macedonia | 13.40% | 750.4 | 48.2 |
| Serbia | 28.30% | 1,586.40 | 101.8 |
This performance-based model strengthens accountability and rewards reform progress. A portion of the funds (EUR 30 million) is reserved for technical and administrative support and is excluded from the country-level allocation.
Additionally, EUR 360 million in loan provisioning will be paid into the EU’s Common Provisioning Fund and not disbursed to the beneficiaries.
Facility and Loan Agreements
In order to access the funds, each country must sign two legally binding agreements with the European Commission:
- The Facility Agreement, which provides the framework for disbursement and sets conditions related to monitoring, reporting, auditing, and evaluation.
- The Loan Agreement, which outlines the terms of the concessional loan, including repayment schedules, interest rates, and disbursement modalities.
Disbursement of both grants and loans is conditional upon the entry into force of these agreements.
Disbursement Process, Conditionality, and Pre-financing
Disbursements from the RGF are performance-based and subject to multiple levels of conditionality. Payments are made twice per year, following a formal request by the beneficiary country and a verification process conducted by the European Commission.
Each national Reform Agenda is divided into quantitative and qualitative benchmarks, referred to as payment conditions. These are time bound and tailored to the country’s reform priorities. The Commission verifies the fulfillment of these conditions before each disbursement.
There are three main sets of conditions:
- Preconditions, which must be upheld continuously and include adherence to democratic standards. For Serbia and Kosovo, this includes constructive engagement in normalising relations.
- General conditions, which relate to macro-financial stability, sound public financial management, and budget transparency.
- Payment conditions, which are specific to each country and are detailed in the Reform Agenda.
Failure to meet any of these conditions can lead to the suspension or reduction of payments.
Beneficiaries may request pre-financing of up to 7% of their total RGF allocation. This pre-financing is intended to support early implementation efforts and is disbursed after the Facility and Loan Agreements enter into force.
Role of the WBIF
The Western Balkans Investment Framework (WBIF) is a central financing and coordination platform under the RGF. At least half of the entire RGF envelope will be channelled through the WBIF to support regional and national investment projects in areas such as transport, energy, digital infrastructure, and environmental protection. The WBIF also provides technical assistance, supports project preparation for implementation, and enables the blending of EU funds with international financial institutions and bilateral donors.
Monitoring and Transparency
The European Commission will assess the implementation of the Reform Agendas twice a year and verify whether the relevant conditions are met before releasing payments. These assessments include desk reviews and on-site verifications. All payments and evaluations will be published online to ensure transparency.
National governments are expected to maintain full transparency in the use of RGF funds, including publishing budget data and cooperating with civil society and oversight bodies. Independent audits and evaluations will also be carried out to ensure compliance and results.
