EBRD signs €30m risk-sharing agreement with Albania’s Union Bank

By Vanora Bennett

Cityscape

  • EBRD signs €30 million risk-sharing agreement with Albania’s Union Bank
  • EBRD will be able to risk-share Union Bank’s corporate and SME loan exposures
  • Agreement signed during visit to Tirana of EBRD Managing Director Charlotte Ruhe

Albanian businesses will benefit from better access to finance as a result of a €30 million unfunded Risk Participation Agreement that was signed in Tirana by the EBRD’s Managing Director for Central and South-Eastern Europe, Charlotte Ruhe, and Union Bank, a longstanding client.

Through the Risk Sharing Framework, the EBRD offers partner banks funded or unfunded risk-participation schemes in US dollars, euros or local currency, under which the EBRD will take part of the risk of sub-loans extended by partner banks to eligible clients.

Union Bank is the third bank in Albania to join the EBRD’s Risk Sharing Framework. This framework aims to assist local partner banks in meeting the financing needs of successful corporates and small and medium-sized enterprises (SMEs).

The new cooperation will support Union Bank's strategy to achieve sustainable growth and allow it to lend more to SMEs, both meeting the higher financing needs of its selected clients and keeping its risk-weighted assets under control.

Local banks’ ability to support the growth of successful SMEs, which are the backbone of economies across the Western Balkans region, is often constrained by single-borrower exposure limits imposed by central banks or by their own internal guidelines that aim to manage loan portfolio concentration.

To date the EBRD has invested nearly €1.3 billion in 91 projects in Albania.