January 13 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) together with Albanian government have signed an agreement with Societe Generale Albania to provide it with a 30 million euro ($31.9 million) unfunded risk sharing facility, aiming to support the country's agribusiness sector, the EBRD said.
Under the agreement EBRD together with the government will cover up to 50% of a portfolio amounting to 60 million euro of eligible loans to the agribusiness sector in Albania, the EBRD said in a statement late on Thursday.
In addition, technical cooperation funds will support Societe Generale Albania with developing and marketing new financial products that meet the needs of the country's agribusiness sector.
"We welcome the signing of the Risk Participation Agreement with Société Générale Albania as it represents a significant step in the development of our facility and for Albania’s agribusiness sector. The growing interest in the facility’s products is a huge encouragement to continue our efforts. With Societe Generale Albania we welcome another partner with the potential to boost our impact," EBRD head in Tirana, Matteo Colangeli said in the statement.
The Albania Agribusiness Support Facility, launched by the EBRD and the government of Albania last year, is improving access to finance for local agribusinesses through dedicated credit lines or by sharing the risk of lending to the agribusiness sector.
The government has committed to make available up to 36 million euro to support the facility and the EBRD is providing up to 100 million euro in funding and risk-sharing facilities.
Agribusiness is a vital sector of Albania’s economy. It provides employment for more than 50% of the population in rural areas and contributes around 20% to the country’s GDP. However, the sector remains under-serviced by financial institutions, with loans to agribusiness accounting for only 2% of total lending to the economy.
($= 0.9393 euro)