Provision of a stand-by credit line to the Albanian Deposit Insurance Agency (ADIA) in the amount of up to EUR 100 million, which will be available for 2 years and fully guaranteed by the Government of Albania. ADIA would be able to drawdown funds from this credit line under certain pre-agreed conditions with the purpose of making funds available, make payments or transfers in respect of insured deposits in accordance with the law in Albania.
The project will enable ADIA to put in place adequate emergency funding arrangements in order to maintain high confidence in the financial sector and to provide an efficient and credible protection for depositors in Albania.
ETI score: 70
The expected transition impact of the project steams from its contribution to the Resilient and Well-governed transition qualities:
The project will contribute to the Resilient quality through putting in place emergency funding, which will strengthen ADIA's ability to withstand any potential bank and SCA failures in the context of the COVID-19 crisis and continue maintaining high confidence in the Albanian banking sector.
The project will also support the Well-governed quality through a comprehensive technical assistance programme focused on strengthening ADIA's operational capacity and governance by fully automating the pay-out process, by modernising the internal reporting system and by laying the foundations for introduction of a risk based premium approach.
DEPOSIT INSURANCE AGENCY OF ALBANIA
ADIA was founded in 2002 as an independent public institution with the adoption of the Deposit Insurance Law. ADIA has a two-tier board structure consisting of a Governing Council and the General Director of the agency. The Board of Directors comprises five members.
EBRD Finance Summary
Total Project Cost
Additionality is generated from the financing structure, risk mitigation and knowledge, innovation and capacity building. The project will provide emergency back-up financing of a significant amount and specific structure. The project mitigates economic and country risks by supporting confidence in the financial system, as well as by ensuring timely pay-out of deposits through the TC element, improving operational capacity and capabilities.
Environmental and Social Summary
Categorised FI (ESP 2019). This is a Deposit Protection transaction with a previous client, ADIA. Since there are no adverse environmental and social issues associated with deposit insurance, environmental and social management systems as per PR9 are not required. ADIA will be required to comply with the 2019 E&S Policy, specifically PRs 2 and 4, and update their existing procedures to reflect this if necessary. The client will be required to report annually on environmental and social matters, with a main focus on PR 2 and 4 reporting.
Technical Cooperation and Grant Financing
A Technical Cooperation (TC) Programme comprising of two dedicated TC assignments will support ADIA's to (i) modernize and automate its pay-out and complaint management process through the upgrading and enhancement of its Data Collection and Reporting System and (ii) develop the internal capacity to introduce differential risk based premium.
Company Contact Information
Rr. Elbasanit, Pallati Edil Al It, No 317 Tirana, Albania
PSD last updated
12 Mar 2021
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