EBRD teams up with Raiffeisen to mobilise lending in Albania

By Axel  Reiserer

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  • EBRD providing guarantee for up to €100 million to Raiffeisen Bank in Albania
  • New instrument backs new loans at a multiple of the guarantee amount
  • Innovative Covid-19 crisis response with large-scale commitment to green lending

The European Bank for Reconstruction and Development (EBRD), Raiffeisen Bank International (RBI), and Raiffeisen Bank Albania (RBAL) are joining forces to unlock lending to Albanian businesses as the country faces the economic impact of the coronavirus pandemic.

Under the innovative new Guarantee for Growth mechanism, the EBRD is providing RBAL with an unfunded guarantee for up to €100 million in local currency equivalent linked to the bank’s local currency sovereign bond portfolio. In return, RBAL will use the freed-up risk-taking capacity from this commitment to increase lending to the real economy at a multiple of the guarantee amount.

Sub-loans under the programme will focus on supporting sound small businesses which are key for Albania’s economy. At least €10 million in local currency equivalent will be allocated to green projects supporting the country’s sustainable and inclusive growth.

In parallel, the EBRD is launching a dedicated technical cooperation programme with Bank of Albania, the country’s central bank, focused on aligning the local prudential framework with that of banks in the European Union. The programme is supported by the Luxembourg – ODA Technical Co-operation Fund and builds on the work under the Vienna Initiative, where the EBRD is active in safeguarding the financial stability of emerging Europe by promoting regulatory alignment of banks with international best practice.

Jürgen Rigterink, EBRD First Vice President, said: “The EBRD is pleased to launch a new product today which addresses key issues to improve access to finance at a time when keeping viable companies going is more pressing than ever. We are very happy to team up with our long-standing partner Raiffeisen once again. The trust and confidence we have built in many years of cooperation allows us now to take a big leap forward and we are convinced that today marks the beginning of yet another joint undertaking.”

“We are excited to collaborate with the EBRD on this innovative product in order to support the real economy in the region and help finance sustainable projects,” said RBI CEO Johann Strobl. “Our partnership demonstrates the strength and benefit of cooperating with others and thinking outside of the box in times of crises when fast and effective solutions are needed the most.”

Christian Canacaris, CEO of Raiffeisen Bank Albania, said: “We are pleased to partner with the EBRD on this innovative project. Local banks’ ability to support the growth of successful corporates and small and medium-sized enterprises, which are a pillar of the economies in the Western Balkans, is often constrained by the regulations in place. The facility will strengthen RBAL’s capacity to boost financing to the private sector and to meet the financial needs of selected clients. In addition, through this agreement, we will further increase our support towards financing of green technologies in Albania and impact the sustainable development of the country.”

To date, the EBRD has invested almost €1.5 billion in 104 projects in Albania. The Bank’s strategy in the country focuses on governance, private sector competitiveness and inclusion, energy diversification, and the low carbon transition.

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