About LRCP

Project Overview

Background information

Local and Regional Competitiveness Project (LRCP) is a four-year investment operation financed with a grant from the European Union (IPA II), and consists four components. LRCP is based on a holistic approach to tourism development and destination management and will provide investment funding and capacity building to support sector growth, investment in destinations, and specific destination prosperity.

The Project Development Objective of the LRCP is to enhance the contribution of tourism to local economic development and improve the capacity of the Government and public entities to foster tourism growth and facilitate destination management.

Component 1: Technical Assistance for Tourism Development (World Bank Executed)

This Project Component will improve the capacity of institutions and business environment in support of tourism development at the national level, through advisory services, analytical assistance, and policy advice. Areas of focus are derived directly from diagnostic work that highlights key challenges. This component includes technical assistance for the following activities:

  1. Improve institutional coordination, including assistance to implement recommendations for strengthening the horizontal and vertical institutional coordination mechanisms and results among the institutions at the central level, from the central to the regional and local levels and among the units at the local level.7
  2. Review and advise on the draft National Tourism Strategy for the period 2016 onward (currently under preparation), its action plan, and its environmental and social impacts.
  3. Improve the availability and use of data to inform policy-making, including assistance to support the Government as it implements recommendations on the current state of data collection in the sector and its use for evidence-based policy-making.
  4. Improve the business environment, including funding selected analysis and advice on measures specific to tourism, particularly in the areas of industry standards, licensing, accreditation, and the regulatory burden on micro and small enterprises.
  5. Support and just-in time technical advice to the PIU and Implementing Agency, including the World Bank’s implementation support to the project’s activities. This includes, among other things, development of the Grant Manual (rulebooks) of the financing instruments under Component 3.
Component 2: Strengthening Destination Management and Enabling Environment

This component will support implementation of activities to enhance tourism development at the central government level and at the destination level, including but not limited to:

Sub-component 2.1: Central Level Capacity, Coordination and Policy

  • training in public-private dialogue and tourism development;
  • systems and equipment to implement improvements in data- and information-gathering, its linkages with policy-making; and
  • technical assistance to implement business environment reforms (including selected equipment, e.g. IT).

Sub-component 2.2: Destination Management

LRCP will build Destination Management capacity in the destinations participating in the project, in order to more effectively manage tourism development and provide greater impacts for local people. This Sub-component will provide support through technical assistance and limited equipment or service provision.

Destination Management will be improved through an approach centered on public-private dialogue (PPD) with key stakeholders (including tourism businesses and tour operators, municipalities, centers for regional development, NGOs, local service or skills development institutions, and others) in the destination.

Component 3: Investment in Tourism-Related Infrastructure and Linkages at Destinations

This component will support key investments that will make an impact on increasing the attractiveness of the selected destinations through upgraded product offerings and linkages with local economies to capture a greater share of economic benefits. The component will provide funds for investment in infrastructure and non-infrastructure activities (training, publications, upgrading of supplier capabilities, etc.) in the destinations participating in LRCP.

Sub-component 3.1: Infrastructure Investments

Sub-component 3.2: Linkages and Innovation Sub-grants)

These sub-components shall be considered as an integrated set of measures that will improve the attractiveness of a limited number of touristic destinations through a smart combination of “soft” and “hard” measures. Financed Sub-project proposals must: (1) meet the needs of the circuit/corridor; (2) have positive economic and financial returns; (3) attract further private sector investment and business development; and (4) be sustainable over time. Integrated with the destination management activities from Component 2, the package of interventions will facilitate the realization of impacts such as job creation, attraction of new tourists, increased overnights and spending per tourist, increase in revenue and tax generated from tourism related activities, and opportunities for participation by rural, poor, and marginalized communities.

Component 4: Strengthening Project Management

This component will support the capacity of the PIU to ensure that all activities executed under LRCP are effectively implemented. It will finance technical expertise (consultants), training, equipment, operating costs, and equipment associated with implementation, monitoring and evaluation of project activities.

Staff and consultants of the PIU will be trained, as necessary, in tourism development and destination management, and in the concepts, policies and activities supported under LRCP. PIU staff will also provide training to beneficiary municipalities/public entities in tourism development, cultural heritage, regional development, and related areas.


Local and Regional Competitiveness Project (LRCP)


Enhance the contribution of tourism to local economic development and improve the capacity of the Government and public entities to foster tourism growth and facilitate destination management.


22.914.925 Euro
* The Project is funded by an 18.000.000 euro grant from the European Union’s Instrument for Pre-Accession Assistance II and co-financed by the Government of North Macedonia with 3.176.471 euro.


14.01.2016 – 31.12.2019


European Union


World Bank
* The project is administered by the World Bank, through a Trust fund (Local and Regional Competitiveness in Tourism Trust Fund) using applicable World Bank guidelines and procedures on environmental and social management, financial management, procurement and implementation support.

Implementing agency

Cabinet of the Deputy Prime Minister for Economic Affairs (CDPMEA)

Project Components

LRCP consist four components:

Technical Assistance for Tourism Development;
Strengthening Destination Management and Enabling Environment;
Investment in Tourism-Related Infrastructure and Linkages at Destinations;
Strengthening Project Management

Project Beneficiaries

LRCP support the growth and development of the tourism sector at the central, regional, and local levels. The direct project beneficiaries are:

Central government entities;
Regional and local stakeholders (i.e. municipalities, Centres for Regional Development, private sector associations, etc.);
Regional and local stakeholders and enterprises that carry out projects to improve destination competitiveness and the tourism offering.

Roles and Responsabilities

LRCP is managed as a Hybrid Trust Fund.

Cabinet of the Deputy Prime Minister for Economic Affairs is the responsible implementing agency. The main implementation unit of the LRCP project is the Project Implementation Unit (PIU) established within the Cabinet of the Deputy Prime Minister for Economic Affairs.

World Bank Group is responsible for overall supervision of the Project (Components 2,3 and 4) and execution of Component 1.

The Delegation of the EU has an advisory role to the Project Steering Committee.

Project Steering Committee is composed of 9 representatives nominated from the following institutions:

Cabinet of the Deputy Prime Minister in charge for Economic Affairs and coordination of economic departments, as Chairman of the Project Steering Committee;
Secretariat for European Affairs;
Ministry of Finance;
Ministry of Economy;
Ministry of Local Self Government;
Ministry of Culture;
Ministry of Transport and Communications;
Ministry of Environment and Physical Planning;
Agency for Promotion and Support of Tourism

  • Additional private sector investment generated in tourism-related activities at beneficiary destinations;
  • increase in the number of tourism-related jobs created at beneficiary destinations;
  • forms implemented that were identified through a consultative public-private dialogue destination management process;

Independent Auditor Report 2016-2017

Independent Auditor Report 2018

Independent Auditor Report 2019