In the heart of Rahovec/Orahovac’s touristic area, near its renowned vineyards, a big project is underway.  Rahovec/Orahovac is building a modern sports complex, set to be the city’s largest. Mayor Smajl Latifi introduced this project early in 2021, emphasizing that it will be one of the most attractive sports areas and an added value for the city. The project’s cost is over 350 thousand euros and includes one large football field, two small football fields, and a track for athletics, changing rooms, sanitary facilities, and outdoor lighting

Students playing in one of the sports fields built in the municipality of Rahovec using the Performance Grant

Undoubtedly, this is one of the biggest direct investments that the Municipality of Rahovec/Orahovac has made in years. A public sports complex is a crucial community hub, nurturing well-being, social cohesion, and talent. However, not all municipalities in Kosovo have such facilities. Rahovec/Orahovac groundbreaking project, backed by the Municipal Performance Grant (MPG), marks a significant shift.

The Municipal Performance Grant is an innovative tool developed by the Decentralisation and Municipal Support (DEMOS) Project, in close cooperation with the Ministry of Local Government and Administration (MLGA) to support municipalities. DEMOS is co-funded by the European Union, Switzerland, Sweden and Norway, and is implemented by Helvetas Swiss Intercooperation Kosovo.

From 2014 to 2023, grants totaling 33.5 million euros were awarded across 33 out of 38 municipalities. These grants financed 430 projects, positively impacting the lives of one million citizens.

 “When we take into account the small budget for capital investment in our municipality, the impact of the Performance Grant is very large, because it helps to realise many planned projects and increases the efficiency and quality of providing public services to citizens”, remarks Mr. Ali Morina, Chief of Staff of the Mayor of Rahovec/Orahovac. “When we take into account the small budget for capital investment in our municipality, the impact of the Performance Grant is very large, because it helps to realise many planned projects and increases the efficiency and quality of providing public services to citizens”, remarks Mr. Ali Morina, Chief of Staff of the Mayor of Rahovec/Orahovac.

The impact of these projects hasn’t gone unnoticed by locals like Mr. Nehat Canziba. Living in an area where a new flood relief canal, funded by the Municipal Performance Grant, is under construction, Nehat recalls the difficulties they faced. 

 “We used to have problems every year. We used the dry creek as a road and when there were heavy rains, holes would open up and we’d usually get stuck with tractors and cultivators. It was a hassle, and this is the most valuable investment of the municipality”, Nehat affirms.

The Municipality of Gračanica/Graçanicë is another success story. Awarded for its performance with the Municipal Performance Grant 2020, this municipality has used the funds to adjust the riverbed of the Graçanka River.

Strahinja Aitonović, a nearby resident, recounts the conditions around the river pre-construction, citing tall grass and accumulated garbage. He shares, “When heavy rainfall occurred, the river would overflow, and our houses would always be flooded.” Confirming the transformative impact of investment from the MPG funds in the riverbed, Vladica Trajković, the director of public utilities in the municipality of Gračanica/Graçanicë, affirms that these initiatives have effectively safeguarded this part of the city from flooding.

While in Gjilan/Gnjilane – a municipality awarded with the Grant for several years – investments were made in the roads construction, river bed, water supply network and sewerage system through these funds. The mayor Alban Hyseni praised also the value of the MPG. “All the above-mentioned projects have influenced the improvement of the services for the citizens, for which we express our gratitude”, he concluded.

How does the Municipal Performance Grant work? 

Kosovo comprises 38 municipalities, with Podujevë /Podujevo being the largest by area and North Mitrovica the smallest. Each year, the Ministry of Finance calculates budgets for municipalities based on factors like territorial size, population, and minority percentages.

In 2014, the Swiss Agency for Development and Cooperation (SDC) started to work with MLGA to institutionalise a performance-based support to municipalities, through the DEMOS Project.

Currently, municipalities are awarded a grant if they successfully meet four minimum conditions: reporting their data in the Municipal Performance Management System, reviewing the municipal acts, successfully spending their investment budget and, implementing financial management and control systems. The amount of grant is based on their population and their score on 30 different performance criteria.  

As a result of the ongoing international support, Kosovo is witnessing progress in municipal performance.

“DEMOS has cooperated for years with the Ministry of Local Government Administration, in the establishment of the Performance Grant, to incentivise improved municipal performance and delivery of services to all citizens. The results can be seen in the increasing performance of the municipalities over the years, and the number of projects won by the municipalities and invested in capital projects, that have served the citizens in their municipalities. Furthermore, the performance system has had a positive impact on internal proceedings and decision-making of municipalities”, says Mr Ertan Munoglu, the DEMOS Project Manager.

The Minister of Local Government Administration, Mr. Elbert Krasniqi sees the Municipal Performance Grant as a key chance for municipalities to fund their projects and to demonstrate commitment through fair competition.

“The Ministry, together with donors, has created a competition between municipalities through this scheme, and the winners of this competition are municipalities that fulfil the criteria and achieve the maximum points in the indicators that are based on the needs of the citizens”, the minister said. 

A review report on the MPG, conducted at the end of 2023 by an international consultant, Mr. Gerhard van ‘t Land, states “Over the past nearly ten years, the Municipal Performance Grant in Kosovo has matured into a generally accepted and appreciated tool to bring out both performance gaps in Municipalities, as well as systemic gaps that hamper municipal performance”.

Donor support for municipal performance 

Beate Katja Elsässer, Head of Cooperation in the Embassy of Switzerland in Kosovo – a long-standing and core supporter of local governance in Kosovo – outlines her view on the significance of the Municipal Performance Grant.

“Switzerland has supported a well-functioning governance system in Kosovo since 2006. Municipalities are directly serving citizens’ needs. That is why a municipality should have the tools and capacities to plan and use efficiently and effectively public funds. The Swiss support of local governance aims at strengthening the performance capacity of municipalities and a good communication mechanism between the central state level and the municipalities. The MPG is a tool to incentivise both,” she noted.

Throughout the years, the MPG has served both as a tool of democratisation at the local governance level and a financial boost through projects that affect the everyday lives of citizens. This is one of the main reasons that led to the ongoing support of donors, and to the transformation that will follow up in the third, and final phase of the DEMOS Project.

Sweden is one of the contributing donors of MPG and local governance in Kosovo. The Swedish Deputy Head of Mission in Kosovo, Mr. Henrik Riby expressed his gratitude for the support that his country is providing to enhance democratisation and accountability at the local level.

“Through improvement in the fields of democratic governance and the provision of municipal services, local authorities ensure inclusiveness in designing and implementing projects in line with the requirements of the communities,” he added.

In the endeavour to foster effective municipal governance in Kosovo, the EU Ambassador in Kosovo, Mr. Tomáš Szunyog, highlights the European Union’s commitment to a pioneering mechanism designed to enhance municipal performance. 

“As the EU, we take immense pride in being a part of this innovative mechanism that fosters municipal performance and brings citizens closer to their local administrations. Improving the efficiency of Kosovo municipalities is a key aspect of good governance. An accountable, transparent, and well-functioning public administration improves citizens’ lives and contributes to their well-being,” he emphasises.

From international support to local empowerment 

In August 2022, Kosovo’s Parliament approved the Law on the Performance Management System of the Municipalities and Performance-based Grant Scheme.

This new law aims to further institutionalize the grant and the performance management system, guaranteeing at the same time financial support. The Law defines principles, rules, procedures, and standards of measurement of the performance of the municipalities, as well as the operation of the performance-based grant and performance management system. 

“Now with the entry into force of the Law on the Performance Management System of Municipalities and the Performance-based Grant, we have shown the necessary dedication and commitment that this grant can be managed by the Ministry of Local Government Administration”, says the minister of MLGA, Mr. Elbert Krasniqi. 

The Ministry of Local Government Administration is expected to implement the Municipal Performance Grant independently by the end of 2025. DEMOS is supporting this transition. 

“We are cooperating closely with MLGA so that the performance system and the performance grant are managed solely by MLGA. Municipal performance management and the performance grant are now sustainable through the law and financing by the Government of Kosovo. In addition, we are also supporting MLGA to further develop capacities to manage the Grant and the system in general, independently from us”, says Mr Ertan Munoglu, the DEMOS Project Manager. 

While the MPG continues to support municipalities, the performance scheme results have turned into a reference on municipal conditions in Kosovo for many, including civil society.

Mr. Sadri Rrmoku, an expert on Local Governance and Democratization from Kosovo Local Governance Institute (KLGI) explains that many civil society organizations in Kosovo, refer to the MPG results when applying for different donor calls, and implementing projects related to the needed interventions at the local level. 

“The performance system exists thanks to the performance Grant, and the Performance Grant thanks to international donors,” he says, highlighting that due to the interest of donors to invest on a local democratisation level, civil society advocated for the institutionalisation of the performance scheme system. “It is probably the best model we have. I think that in the future we should move from the quantitative measurement of performance to the qualitative measurement of projects implemented at the local level, but for now, this works too”, Rrmoku concluded.

Local governance is like a foundation for community well-being, connecting the hopes and needs of people. From building roads to providing services, the decisions made by local leaders profoundly impact the fabric of community life. Good local governance is crucial for everyone’s well-being. Over the past decade, the Municipal Performance Grant has made a difference in Kosovo, by effecting changes in the management and functioning of communities.