Albania to launch development bank in partnership with Italian financial institution
The Albanian government has announced plans to establish the Albanian Development Bank, a key initiative aimed at boosting investment in vital sectors such as agriculture. The effort will be supported by Italy’s Cassa Depositi e Prestiti (CDP), a financial institution with over 200 years of experience, which will assist in the bank’s creation and co-manage its operations alongside Albanian experts. The draft law for the establishment of the bank is currently being prepared, according to Prime Minister Edi Rama.
Why is this important: Agriculture remains a very important sector of Albania’s economy and a crucial sector for state revenue. Despite government grants to support farmers, the temporary suspension of EU IPARD funds due to allegations of corruption has put the sector under significant strain. The creation of the Albanian Development Bank seeks to address these challenges by financing projects in key areas of the economy, with a special focus on revitalizing agriculture.
Context: Prime Minister Rama outlined the vision for the Development Bank during a public announcement. He emphasized the importance of collaboration with CDP in ensuring the bank’s success.
“Thanks to our partnership with the prestigious Cassa Depositi e Prestiti in Italy, part of the country’s crown jewels of excellence, we are ready to add this engine of development to Albania. The project is solid and will soon be put to public consultation. The bank will be managed by a top-tier Albanian-Italian team, with close assistance from CDP to guarantee independent and effective governance,” said Rama.
In addition to the Development Bank, another program targeting agriculture is set to be implemented. The Albanian government plans to provide sovereign guarantees for a new financing scheme approved by the Bank of Albania, aimed at offering soft loans to small and medium enterprises (SMEs).
The challenge: The Bank of Albania has recently approved a €250 million funding line focused on small and medium-sized enterprises, with agriculture as a primary area of support. The program offers businesses loans of up to €250,000 for investments, with interest rates capped at 3.5%. However, the government’s sovereign guarantee is expected to reduce this rate further, potentially to as low as 2%.
Prime Minister Rama highlighted the significance of this initiative:
“The Bank of Albania has just approved a new financing line for small and medium enterprises, with a main focus on agriculture, amounting to €250 million. We have discussed supporting this financing scheme with a sovereign guarantee from the government, representing the largest volume ever provided for soft loans.”
This dual approach—creating a development bank and offering subsidized financing for SMEs—is indicative of the government’s commitment to strengthening the agricultural sector.
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