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- EBRD and EU launch first portfolio risk-sharing guarantee in Albania with Union Bank
- €25 million unfunded guarantee to unlock up to €50 million in new SME loans
- One-third of guaranteed funding to go to green projects
The European Bank for Reconstruction and Development (EBRD), in partnership with the European Union (EU), is supporting Union Bank in Albania with an unfunded portfolio guarantee of up to €25 million. This innovative risk-sharing solution is designed to stimulate lending to small and medium-sized enterprises (SMEs), including green projects, and to advance financial inclusion across the country.
The guarantee, provided under the EBRD’s portfolio risk-sharing framework, will cover up to 50 per cent of the credit risk on a newly generated SME loan portfolio of up to €50 million that will be originated by Union Bank. The operation includes first-loss risk cover of up to €2.5 million provided by the EU through the European Fund for Sustainable Development Plus, further enhancing the risk mitigation of the arrangement.
This is the first such project in Albania, building on the success of the Albania Agribusiness and Tourism Support Facility, and marks a significant expansion of the EBRD’s product offering in the country. It is designed to de-risk partner financial institutions and address persistent SME financing gaps, while also enabling them to channel their own liquidity into new lending. The structure provides capital relief and strengthens the resilience of the banking sector, unlocking new opportunities for underserved segments.
At least 30 percent of the guaranteed funding will be dedicated to green projects that align with the EBRD’s Green Economy Transition approach, supporting Albania’s transition to a more sustainable economy. The project will also benefit from a technical cooperation package, funded by the EU, to support capacity building for the implementation of the project and the green economy transition.
Ekaterina Solovova, EBRD Head of Albania, said: “We are pleased to partner with Union Bank to launch portfolio risk sharing in Albania. By sharing risk and supporting green investments, we are helping to unlock new financing for SMEs and promote financial inclusion. This project demonstrates our commitment to supporting Albania’s economic growth and sustainable development.”
Ritva Heikkinen, Head of Cooperation at the EU Delegation to Albania, said: “The European Union continues to support Albania’s private sector as a key driver of economic growth, job creation and social inclusion. Through this guarantee, we are helping commercial banks to expand access to finance for SMEs – especially those of underserved businesses in rural Albania – while also promoting green and innovative investments that are fully aligned with the EU Green Agenda. This support contributes to Albania’s green transition and its progress towards EU accession.”
Flutura Veipi, Chief Executive Officer of Union Bank, said: “We are proud to deepen our partnership with the EBRD and the EU through this pioneering portfolio risk‑sharing guarantee. This initiative strengthens our capacity to offer broader and more affordable financing to Albanian SMEs, which remain the backbone of our economy. Also, by dedicating a significant share of the funds to green investments, we are supporting businesses in their transition to more efficient and environmentally responsible practices. This project marks an important step in Union Bank’s strategy to foster inclusive growth and contribute to Albania’s long‑term economic development.”
Union Bank is a commercial bank in Albania specialised in SME and retail lending. It is a long-time client of the EBRD, which was a shareholder in the bank from 2008 to 2021.
Since the start of its operations in Albania in 1991, the EBRD has invested more than €2.4 billion in almost 180 projects across the country.