- EBRD signs a risk-sharing facility of up to €7.11 million with OTP Bank Albania under the Albanian Agribusiness and Tourism Support Facility
- 10 per cent investment incentive for sub-borrowers in the agribusiness and tourism sectors
- Joint framework supported by the European Union and Government of Albania
The European Bank for Reconstruction and Development (EBRD), OTP Bank Albania and the Albania Agribusiness and Tourism Support Facility are stepping up their support for companies in the country’s agribusiness and tourism sectors.
Together with the government of Albania and the European Union (EU), the EBRD is committing up to €7.11 million of loans to eligible firms in the agribusiness and tourism sector, risk-shared with its partner bank, OTP Bank Albania. The funds will be provided through the Albania Agribusiness and Tourism Support Facility (AATSF), a framework aimed at improving access to finance for small and medium-sized businesses.
The facility also includes a 10 per cent investment incentive for sub-borrowers in the agribusiness and tourism sectors, funded by the government of Albania and the EU, respectively. Borrowers will receive the grant incentive once their investments have been completed and verified. The facility will also benefit from a government-backed first-loss risk cover mechanism.
Frida Krifca, Albania’s Minister of Agriculture and Rural Development, said: “We are fully committed to guaranteeing the functioning of all mechanisms that help reduce the gap between agricultural producers and financial institutions. As part of the €180 million fund allocated under the AATSF framework with the EBRD, the Ministry of Agriculture and Tourism has committed €36 million to first-loss cover as additional support for each sub-borrower, business or individual.”
Mirela Kumbaro, Minister of Tourism and Environment, commented: “Our strategy is to offer all-season tourism and to build on the offer, including agritourism, ecotourism, sports tourism and so on. In this context, the AATSF is key to the development of the sector, providing support for farms or agritourism. Agritourism plays a vital role in the promotion of our best values, and this mechanism, through which the government provides a guarantee for the loans, is a further incentive for the sector. The initiative directs all the funds to those who have the vision and passion to invest.”
Ekaterina Solovova, the EBRD’s Head of Albania, said: “We are pleased to step up our support for the Albanian tourism and agribusiness sectors under this joint framework with the EU and the Albanian government and to further strengthen our excellent cooperation with OTP Bank Albania. Both the agribusiness and tourism sectors are vital to the country’s economy and improving their access to finance is particularly important. We are grateful to our partners for supporting this important programme.”
Bledar Shella, CEO of OTP Bank Albania, said: “We greatly appreciate this initiative of the Albanian government and the EBRD, in cooperation with the EU, all of which are engaged in further supporting the tourism and agriculture sectors, which play a very important role in the country's economy. OTP Bank Albania has an excellent partnership with the EBRD and we are very pleased to engage in financing these growing sectors. We believe that, together, we will strengthen our important role in the development of the economy and, more specifically, the sectors of tourism and agriculture in the country.”
Up to €180 million has been allocated to date under the AATSF for specialised credit lines and risk-sharing facilities through local partner banks. Since its launch in 2016, more than €70 million in loans have been committed, benefiting more than 6,100 local agribusiness SMEs. The AATSF complements the EU’s instrument for pre-accession assistance for rural development (IPARD), which has channelled financing to numerous beneficiaries through the AATSF.
In addition to financing instruments, the EBRD is providing technical assistance to both financial institutions and sub-borrowers through the EBRD’s Advice for Small Businesses programme in Albania.
Agribusiness is a vital sector of Albania’s economy. It provides employment for more than 50 per cent of the population in rural areas and accounts for around 20 per cent of national gross domestic product (GDP). Still, the sector remains underserved by financial institutions. Tourism, meanwhile, has become a strategic sector for growth and employment and is a key factor in Albania’s sustainable long-term growth and competitiveness. The sector is facing similar constraints in terms of access to finance, particularly in light of the Covid-19 pandemic and the deadly earthquake of 2019.
The EBRD is a leading institutional investor in Albania, focusing on the sustainable development of the private sector, building on the strong entrepreneurial spirit in the economy, enhancing the commercialisation of infrastructure projects and promoting sustainable energy and environmentally sound investments. To date, the Bank has invested €1.74 billion in 117 projects in the country.