Swiss contribution to KfW Regional Challenge Fund for the Western Balkans

Switzerland is investing in vocational education and training as well as in labour-market insertion of unemployed youth through all of its bilateral cooperation programs in the Western Balkans. This contribution will allow Switzerland to join forces with Germany in efficiently raising the quality and labor-market orientation of VET offers across the region, while at the same time fostering sustainable partnerships between VET providers and companies for work-based learning.  

Country/region Topic Period Budget
Vocational training
Employment & economic development
Vocational training
Employment creation
15.11.2022 - 31.12.2027
CHF  9’750’000
Background Youth unemployment rates in the Western Balkan region are among the highest in Europe (34.9%, Q42021; World Bank). About one in four young people is without employment or a training activity (OECD 2021). In the latest Balkan Barometer survey, only 30% of respondents stated that they had been able to find a job within 1 year of graduation, while for 20% of respondents it took 2 or more years to get their first job (RCC 2021). The weak link between education and job requirements is an important reason why many young people feel they have no perspective in the Western Balkans. The major challenge of the VET systems in the Western Balkans lies in their overall poor quality, which is visible when student achievements are compared internationally and which is partially a consequence of deficiencies in practical, work-based learning. As is often the case in transition countries, the education system has difficulties measuring up to the demand for qualified workers by the labour market. This skills mismatch between the VET system and the labour market causes difficulties in school-to-work transition and contributes to high youth unemployment.
Objectives Strengthening of the employment oriented and regional economic development of the Western Balkan countries Six Economies in accordance with the Stabilization and Association Process of the EU. 
Target groups

Main beneficiaries:

Young women and men who enrol into the VET programmes of Vocational Training Institutions supported by the RCF

Secondary beneficiaries

-    Teaching staff of supported VTI benefiting from trainings and exchanges with company instructors;

-    Skilled workers of participating companies trained to become company instructors;

-    All companies benefiting from better skilled workers and lower recruitment costs.

Medium-term outcomes

Increase the employability of participants of at least 84 supported VET projects in 6 countries.



Expected results:  

Output 1:    The Challenge Fund as a regional competitive funding mechanism for the support of selected innovative and labor market-relevant vocational training approaches is established.

Output 2:    Cooperative VET measures with adequate shares of practical in-company training are implemented, based on signed cooperation agreements between VTIs and enterprises.

Output 3:    Training workshops at supported vocational training institutes are equipped according to the demand and allow practical training.

Output 4:    Management and teaching staff at supported vocational training institutes and enterprises are enabled to plan and implement cooperative vocational training measures.

Output 5:    At least 5 regional and/or national knowledge sharing events took place/were supported to anchor successful approaches within the VET systems of participating WB6 Economies. 

Results from previous phases:  

Results of first call for applications: funding agreements with 37 consortia from 6 countries in the Western Balkans, consisting of 37 vocational training institutes collaborating with 152 companies, creating a total new offer of 2474 cooperative training places for young people.

Second call for applications ongoing. 

Directorate/federal office responsible SDC
Project partners Contract partner
International Financial Institution (IFI)
Private sector
  • Other Development Banks
  • Foreign private sector South/East

Other partners
Kreditanstalt für Wiederaufbau (KfW)
Coordination with other projects and actors

All Swiss VET projects in Serbia, Bosnia and Herzegovina, Kosovo, North Macedonia and Albania;

All German, Austrian and EU VET projects in the Western Balkans region.

Budget Current phase Swiss budget CHF    9’750’000 Swiss disbursement to date CHF    5’700’000
Project phases Phase 1 15.11.2022 - 31.12.2027   (Current phase)