ALBANIA: SME RECOVERY CREDIT LINE

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Five-year bank-to-bank loan to Banco Italo-Albanese and Tirana Bank for on-lending to small and medium-sized enterprises (SMEs) in Albania. The principal objectives of the project are: The collapse of the emerging private sector, as a result of the recent political and economic crisis, will have a dramatic reverse effect on the transition process in Albania. The project aims to contain such risk by providing additional resources to SMEs through the private banking sector. Banca Italo-Albanese (BIA) and Tirana Bank (TB) are private banks operating in Albania. Both fulfil the requirements for receiving an EBRD credit line, in terms of local incorporation, capitalisation, substantial ownership by reputable international banking groups and management quality. BIA has a paid-in capital of US$ 12.5 million, while Tirana Bank has currently a paid-in capital of US$ 4.2 million. US$ 6 million to BIA and US$ 4 million to TB: revolving loan with a variable interest rate, five-year maturity including a two-year grace period. The loan will be granted in two tranches of US$ 3 million for BIA and US$ 2 million for TB over a period of two years. The interest rate will be based on a commercial margin above six-month US$ LIBOR. US$ 10 million (ECU 8.71 million). The two banks will follow the EBRD's Environmental Procedures for Local Banks in relation to all sub-loans financed through the credit line. In implementing these procedures, the banks will assess potential environmental issues associated with sub-projects, which are required to comply, at a minimum, with local/national health, safety, environmental and public consultation requirements. None.