- EBRD lends €2 million to boost agribusiness and tourism sectors
- Union Bank becomes seventh partner financial institution to join AATSF
- Financing to be complemented by grants from the Albanian government and the EU
The European Bank for Reconstruction and Development (EBRD) is providing a loan of up to €2 million to Union Bank, to support financing of the agribusiness and tourism sectors. This investment will aim to boost on-lending directed at two important but underfinanced sectors in Albania that are crucial to its economic development.
Union Bank is the seventh partner financial institution in the country to join the EBRD’s Albania Agribusiness and Tourism Support Facility (AATSF), a tailor-made financial instrument in the Albanian market and designed to support commercial banks in offering more loans to small and medium-sized enterprises (SMEs) in the tourism and agriculture sector. This will be the second EBRD project with Union Bank in less than two months, after a Youth in Business loan – another facility to support SMEs – was signed in late July.
The AATSF loan will be complemented by grant funds of up to €560,000, including a contribution of €460,000 from the government of Albania, of which €400,000 is in the form of first-loss risk cover and €60,000 is investment incentives to sub-borrowers in the agribusiness sector. The remaining €100,000, a contribution from the European Union (EU), will fund partial investment grants to sub-borrowers in the tourism sector.
Union Bank will benefit from a technical assistance package that will include capacity-building to develop and market more financial products for companies in the two sectors.
In addition, the Bank’s Advice for Small Businesses programme in Albania will provide business advice and know-how to potential and current sub-borrowers of the agribusiness and tourism credit lines and risk-sharing facilities.
Aleksandra Vukosavljevic, EBRD Director of Financial Institutions for the Western Balkans and Eastern Europe, said: “We are happy to welcome Union Bank among our partner financial institutions under the AATSF. Our continued support for the agribusiness and tourism sectors through this facility demonstrates our commitment to Albania’s key drivers of economic growth and our belief in their strong potential to further boost the Albanian economy. We are convinced that this investment will mark another successful step in our strong partnership with Union Bank.”
The Chief Executive Officer of Union Bank, Flutura Veipi, added: “We are thankful for this collaboration with the EBRD in support of local agribusiness and tourism, two of the most important sectors of our country’s economy. We are convinced that, by increasing the availability of financing to our clients in these sectors, we will contribute to their sustainable development and long-term success.”
Since the launch of the EBRD’s AATSF in 2016, around €180 million in credit lines and risk-sharing facilities has been allocated to partner banks in Albania, of which those banks have on-lent over €110 million to more than 6,200 local agribusiness and tourism SMEs.
The EBRD, a leading institutional investor in Albania, has invested €2 billion in more than 140 projects in the country to date.