Private Industry Recovery Project

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The main objective of the Private Industry Recovery Project is to foster a speedy revival of the private manufacturing sector after its collapse as a consequence of the recent political instability. The project will finance Albanian Guarantee Agency (AGA), which will issue guarantees to entities that finance productive activities in Albania. The project consists of three components. 1) Albania will contribute US$0.7 million as issued and paid-in capital for AGA. 2) Start-up costs (US$0.25 million) of the Albania Guarantee Agency will cover AGA's initial start-up costs for capital expenditures and administrative expenses in its first year. 3) Political Risks Guarantee Facility (US$20 million), managed by AGA, will mitigate the perceived risks that are preventing the private sector from having access to commercial financing for productive transactions or from risking their own funds to re-enter the market. As guarantees are issued, the funds will be placed in escrow with an agent bank outside Albania under liability until the guarantee runs off. The agent bank will also issue the beneficiary of the AGA an irrevocable standby letter of credit to ensure security.