June 17 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Friday it is providing an unfunded risk sharing facility of up to 15 million euro ($16.9 million) to ProCredit Bank Albania, covering up to 50% of a portfolio of eligible loans to the agribusiness sector in Albania.
The overall objective of the debt instrument is to promote and enhance access to finance for agribusinesses in Albania by addressing the financing gap as one of the main challenges for the sector's development, EBRD said in a statement.
The project is part of Albania Agribusiness Support Facility (AASF), which EBRD announced in November, a joint project with the Albanian government worth a total of 180 million euro. The EBRD alone will provide 100 million euro of the total project's funding.
AASF consists of a combination of credit lines for agribusiness lending and unfunded risk sharing options for agribusiness loan portfolios of selected partner financial institutions in Albania. The 15 million euro facility to ProCredit Bank represents the first unfunded risk sharing transaction under the AASF.
In March, EBRD provided the first loan under the AASF. It was a senior unsecured loan of up to 5 million euro to microfinance institution NOA.
According to EBRD, ProCredit Bank Albania is the 10th largest bank in Albania with a leading position in lending to SMEs and agricultural clients. With total assets of 242 million euro as of end-March, it accounts for 2.5% of the country's banking assets. ProCredit Bank Albania is a member of the ProCredit Group, which is led by its Frankfurt-based parent company, ProCredit Holding.
Agriculture is important sector in Albania, employing more than 40% of the population, according to the latest labour force survey.
($=0.8887 euro)
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