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EBRD Regional Director in Tirana
Bank to urge continued economic reform; will affirm support to private sector
Olivier Descamps, Business Group Director for Southeast Europe for the European Bank for Reconstruction and Development (EBRD), arrived in Albania on Monday to attend the Working Table II meeting of the Stability Pact for Southeast Europe. Ahead of the meeting, Mr Descamps today finalised the Bank's €15 million commitment to a €66 million project sponsored by Seament, a Lebanon-based cement company, and co-financed by the International Finance Corporation (IFC). The project will upgrade and boost production at Elbasan Cement. It will also promote major energy savings and improve the company's impact on the local environment. This is the largest private-sector industrial deal in Albania done by the EBRD to date.
During this visit, Mr Descamps expects to meet with Finance Minister Anastas Angjeli to discuss measures to speed up implementation of infrastructure projects signed by the EBRD in 1999 and 2000, as well as the privatisation of the Savings Bank of Albania. The EBRD recently sent a letter to Minister Angjeli, committing the Bank's support to the privatisation of the country's largest bank. Mr Descamps intends to stress that economic reforms and the government's ongoing privatisation programme are bold steps in the right direction, but that the ultimate success of these measures will hinge on how they are implemented.
The trip is designed to reaffirm the EBRD's position as a major supporter of reforms, private sector development and regional cooperation in Albania. The EBRD has current commitments of €121 million in Albania involving 14 projects. Among the EBRD's most recent investments are an emergency road rehabilitation project to promote east-west movement, a power restructuring project, support of the privatisation of the National Commercial Bank, an equity fund to strengthen small and medium-sized local businesses, and initiatives in the tourism sector. The private sector share in the EBRD's Albania portfolio is close to 60 per cent.
The Albanian economy showed good progress in 2000, and the clear expectation is that the investment climate will continue to improve. The 2001 budget for Albania includes several measures that could encourage investors, such as the reduction of some import and tax-duties. The faster pace of privatisation has also fueled increased investor interest. Albania's challenge now is to complete its economic reform agenda and put the economy on a firm path of rapid and sustainable growth, increasing employment and decreasing poverty. In its latest Transition Report Update, the EBRD expects growth in Albania for 2001 to be 6 per cent. It also says that foreign direct investment is increasing annually. Mr Descamps plans to offer the EBRD's support to the privatisation and restructuring of public utilities, further bank privatisation and consolidation, and improving energy-related infrastructure through inward investment. This will require decisive action by the Government to improve the regulatory framework for the financial sector, strengthen transparency in the public administration as well as develop and observe a fair legal and judicial system, Mr Descamps said.
During the Stability Pact Working Table II, Mr Descamps will highlight the progress being made in southeast Europe to improve investment conditions required to enhance the role of the private sector in the sustainable development of the region. The EBRD attaches high priority to government-sponsored initiatives to enhance the credibility of the legal system and regulatory framework because this is fundamental to doing business. The Bank will encourage wider private-sector regional cooperation, especially in trade and cross-border investment, thereby building strong additional incentives for long-term stability and peace. The EBRD will continue to offer its unique support to investors in both the private and public spheres of operations.
The EBRD is the largest investor in southeast Europe. It has invested over €2.5 billion in the region, representing nearly 20 per cent of total foreign direct investment. The Bank is also an active contributor to the Stability Pact.
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