The European Bank for Reconstruction and Development (EBRD) together with the government of Albania have launched the US$149.56 million Albania Agribusiness Support Facility, which will lend up to €300 million in partnership with private institutions to support the development and reformation of the country’s agricultural sector.

“We are very pleased to sign this important Memorandum of Understanding which will support unleashing the potential of Albania’s agribusiness sector,” said EBRD President Sir Suma Chakrabarti.

Under the working terms of the agreement, the EBRD will contribute €100 million to the fund, while the Albanian government will contribute €36 million allocated from its budget over the next three years. Additional institutions that signed a memorandum of understanding to join the funding facility are Raiffeisen Bank of Albania, Intesa Sanpaolo Bank Albania, Societe Generale Albania, and ProCredit Bank Albania, as well as Fondi Besa and NOA – two microfinancing facilities, reports Reuters.

Christoph Denk the Head of the EBRD Tirana Office explained to AgroWeb, “The main idea of the EBRD’s Agribusiness Financing Facility is to unlock financing to agri-businesses by sharing the credit risk among three parties: (1) The commercial bank or microfinance institution (2) The Government of Albania through the National Guarantee Fund, and (3) the EBRD.”

The World Bank states that 43.3% of Albania’s workforce rely on agriculture for their livelihood, and the industry accounts for approximately 21% of the country’s GDP, making it a critical economic sector. However, the country’s ag sector is faced with poor infrastructure, market limitations, and inadequate farming institutions. Moreover, with the fall of communism 25 years ago, Albania saw the fragmentation of its agricultural land into 400,000 small holder farms engaged in subsistence farming without access to credit, and agribusiness accounting for just 2% of the country’s total lending, according to the EBRD.

“We will switch from subsidised [sic] and subsistence farming towards an agriculture of investments and sustainable development,” said Albania’s Prime Minister, Edi Rama. “It has not been an easy process to progress from an innovative idea of our government to the agreement we are signing today. I want to wholeheartedly thank the President of the EBRD, who from day one has been a firm supporter of Albania and of our partnership.”

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Lynda Kiernan