“The visit will provide us with an overdue opportunity to catch up on the latest development, meet the government under Prime Minister Edi Rama and discuss their imminent and long-term plans. We will also speak to the Central Bank and businesses on how to support the sustainable recovery of the economy. This process has started and now we need to combine our efforts to make growth robust and durable,” the First Vice President of the European Bank for Reconstruction and Development (EBRD), Jurgen Rigterink told Albanian Daily News in an exclusive interview.  

The Vice President, Rigterink, who is also the Head of the Client Services Group, will be visiting Albania on 8-9 September, 2021, and as the Bank’s second most senior executive, he oversees the EBRD’s banking department and as such is responsible for its investments in the various sectors of Albania’s economy. Most recently, the EBRD - among others - supported ground-breaking developments in the field of renewable energy, introduced a new “Guarantee for Growth” mechanism together with Raiffeisen Bank International and provided funds for the rehabilitation of the national railways. With more than 1.6 billion euros investments to date, the EBRD is a leading institutional investor in Albania and also a key policy partner. 

“Based on current trends, we expect the (Albanian) economy to expand by around 4.5 per cent this year, bringing the level of GDP above where it was in 2019, and by 4 per cent in 2022,” he said, announcing that among the key projects this year is a EUR 100m stand-by loan facility to the Deposit Insurance Agency to mitigate the impact of the coronavirus crisis on the banking industry and a EUR 9m loan to KESH to finance an important project of building the very first floating solar power facility in Albania.

Mr Rigterink revealed that the EBRD is the leading IFI in Albania and its total cumulative investments in the country stands at almost EUR 1.7billion in 115 projects. He noted that the Bank has significantly stepped up investment volume in the country in recent years, supporting landmark infrastructure projects like TAP and strengthening its support to the private sector, particularly by risk sharing with commercial banks. “We are also particularly proud of the role played in developing the solar power sector in Albania with the auctions for the Karavasta and Spitalla projects, which attracted quality foreign investors and delivered highly competitive prices for Albania’s energy consumers.”

A heartening news was that with the support of the EBRD, EU and other institutional partners, the Albanian Government is currently implementing and preparing important investment projects to revive the rail sector as a more sustainable, cleaner and safer means of transport and bring it to the level of other more developed railways in the region.

Asked about the initiative on the Open Balkans, EBRD’s First Vice President said they strongly support the all-inclusive character of regional cooperation.

“At the same time, we are open to supporting other initiatives for cooperation coming from within the region, particularly if they focus on concrete tangible results for the benefit of the citizens. Generally speaking, we believe in the complementarity of regional initiatives- if only, they help to maintain the dialogue. Given the region’s difficult historic legacy, this is not such a small thing,” First Vice President of EBRD Jurgen Rigterink said in the following interview:

Albanian Daily News: Mr. First Vice President as this is the first opportunity to have you as an honorary guest to this talk with ADN, and we thank you very much for this, please could you tell us a few words on your fields of interest and your path to the position you hold now?

EBRD’s Vice President Jurgen Rigterink:  Many thanks for this question. I would say that development is my passion. I firmly believe in markets, but the market for me is not a goal in itself but the best mechanism how we organise economies that are successful in creating wealth, feeding people and creating opportunities. This requires permanent engagement, activity and involvement. Markets are by definition dynamic and our job as development bankers is to use this potential for common goods. We believe in profit, but not as profit for profit’s sake, but to create more means for investment and distribution. My personal journey started in the private sector where I started working for Bank Brussels Lambert in Belgium and the US, switched to ABN AMRO where I worked in Belgium, Frankfurt and Munich. In the early 2000s I went to Kazakhstan for ABN AMRO before joining the Dutch development bank FMO in 2008 and later becoming its CEO. When the opportunity arose to become a member of the EBRD leadership, I did not hesitate for one second. It allowed me to transform my passion into my daily work. Nothing is more rewarding, and nothing fills me with more pride and satisfaction than the successful delivery of projects, for instance in Albania.

- Mr. Rigterink, please, could you shed some light on the main topics of the agenda of your visit to Albania and how do you assess the current state of its economy and social and health sectors?  

- The visit will provide us with an overdue opportunity to catch up on the latest development, meet the government under Prime Minister Edi Rama and discuss their imminent and long-term plans. We will also speak to the Central Bank and businesses on how to support the sustainable recovery of the economy. This process has started and now we need to combine our efforts to make growth robust and durable.

Investment growth is strong on the back of continuing post-earthquake reconstruction activities, household consumption is expanding, the global demand recovery is driving goods exports and the tourism sector is gradually recovering from the lows of the previous year. Accommodative fiscal and monetary policies are supporting the economic recovery. Increased government spending on healthcare and social assistance is continuing in 2021. Based on current trends, we expect the economy to expand by around 4.5 per cent this year, bringing the level of GDP above where it was in 2019, and by 4 per cent in 2022.

We need the right combination of macroeconomic politics and innovative projects and the EBRD is leading the way: Among the key projects this year is a EUR 100m stand-by loan facility to the Deposit Insurance Agency to mitigate the impact of the coronavirus crisis on the banking industry. We provided a EUR 9m loan to KESH to finance an important project of building the very first floating solar power facility in Albania and we are finalising another important financing to support the liquidity and capital investment program of OSHEE, the power distribution company. Importantly, we have further expanded our cooperation with the Albanian banks in our SME on-lending programs and our unfunded risk-sharing products that enable local banks to free up capital for lending to the Albanian companies. Going forward, the focus will remain on sustainable infrastructure projects and private sector financing, aimed at building back a green, inclusive, digital and competitive economy in Albania.

- With more than 1.6 billion euros investments to date, the EBRD is a leading institutional investor in Albania and also a key policy partner. Please, which are the fields where most of investments have been made and as a follow up, Sir, which has been the role of EBRD as a key policy partner?

- EBRD is the leading IFI in Albania and our total cumulative investments in the country stands at almost EUR 1.7billion in 115 projects. We have significantly stepped up our investment volume in the country in recent years, supporting landmark infrastructure projects like TAP and strengthening our support to the private sector, particularly by risk sharing with commercial banks. We are also particularly proud of the role played in developing the solar power sector in Albania with the auctions for the Karavasta and Spitalla projects, which attracted quality foreign investors and delivered highly competitive prices for Albania’s energy consumers.

-With your permission I would like to know your opinion on the reasons why Albania has remained the only country in the region and Europe without an adequate national railways network. Since the fall of communism it has not been rehabilitated but has degraded to the extreme. It has been a popular means of transportation, people ask for it but everything is delayed. Corruption, conflict of interest, negligence - these and other ones are questions made by the people who need railway transport.

-Until recently, the priority of the country has been the development of the road sector driven by poor road connectivity and rapid increase of the number of private vehicles. This, combined with a severe lack of investments in the railway sector during the last several decades, has led to the reduction of competitiveness of rail services. The Government of Albania has already identified this as a major obstacle for the country’s economic development and regional and European integration. With the support of the EBRD, EU and other institutional partners, the Government is currently implementing and preparing important investment projects to revive the rail sector as a more sustainable, cleaner and safer means of transport and bring it to the level of other more developed railways in the region.

- In your view, Mr. Rigterink, how much has the economy of this Western Balkans country been successful to adapt to the repercussions of the pandemic and in what way has EBRD helped it in this endeavor? Have there been changes to prior plans/projects due to COVID-19, and if yes in which aspects?

- Overall, I would say that the Albanian economy weathered the initial impact of the pandemic quite well. The GDP contraction in 2020 was milder than expected, in particular when compared to neighbouring tourism-dependent countries such as Montenegro. The authorities provided timely support to the economy while ensuring access to external and domestic funds to meet the financing needs. The EBRD has played its part as well; last year, the EBRD was the first IFI to adopt emergency measures under our Solidarity Package introducing new instruments, increased volume of investment and more policy support to address the economic impact of the pandemic. We invested a total of EUR 194 million and mobilised additional EUR 24 million in Albania last year. Looking ahead, as Albania and other Western Balkan countries continue to recover and build back better, we will continue to roll out new investments and policy engagements in Albania, focusing in particular on the three strategic themes of our Strategic and Capital Framework: supporting the transition to a green, low carbon economy; promoting equality of opportunity by supporting access to skills and employment, finance and entrepreneurship and services for under-served communities including women, youth and those in the regions; and accelerating the digital transition, recognising that technology can be a key enabler of transition progress.

- Mr. First Vice President you are visiting Albania as its government is expected to host 4000 Afghan refugees of different walks of life, mostly children and women as it's reported.  Given the dire economic state of Albania relying mostly on tourism and modest living conditions of its people with pensioners receiving a monthly average contribution of less than 200 euros, has your Bank any plans to come to its help to cope with the situation as displeasure is in the air among ordinary people?

- The EBRD as an institution, and I as a private individual, are following the events unfolding in Afghanistan with deep concern. I salute the Albanian government’s courageous and generous decision, while at the same time I am aware about the public debate all over Europe about the admission of refugees. The EBRD as an international financial institution has neither the mandate nor the means or the skills to get involved. But we espouse a very distinct set of values including gender equality and social inclusion. Through our projects in countries of operations such as Albania we are making an active contribution towards this goal.

- In the meantime, Mr. First Vice President, Albania is ranked among the countries with the highest rate of corruption in the region and Europe. How do you check EBRD's portfolio in Albania so that money could go to their destination as designed in projects?

- The EBRD was established to operate in challenging environments and our founders developed very strict and robust rules and procedures which greatly reduce the risk of becoming a victim of corruption or working with dubious partners. All our projects are subject to thorough due diligence which goes well beyond mere business considerations. Our projects also have to pass a multi-layered vetting and approval process before final sign-off by our shareholders, i.e. the governments owning the EBRD. Our involvement does not stop here, but we also monitor the delivery of our projects closely and disburse our funding in stages subject to reaching clearly defined benchmarks. We are also actively helping many countries in their fight against corruption by supporting improvements in the business environments and the establishment of institutions such as investment councils or business ombudsman.

- To conclude, Mr. First Vice President, a general interest of ADN's readers is the developments in the Western Balkans, where your Bank is largely present. Which is your opinion on the new initiative Open Balkans launched by Albania, North Macedonia and Serbia. The 3 other regional countries - Kosovo, Montenegro and Bosnia-Herzegovina, have not joined it. They say Berlin Process and its projects are more efficient. What do you think of this new initiative, and in general do many regional initiatives confront rather than complement each other?

- The EBRD is a strong supporter of regional integration in the Western Balkans, which we believe to be indispensable both for the region’s economic prospects and for its political stability. Our support is not limited to numerous cross-border infrastructure projects that the Bank is funding or co-funding with our partners, we also actively engage in policy work at a regional level. And, last but not least, we are the champions of regional cooperation: since 2014, the EBRD has been organising in its HQ in London biennial Western Balkans Investment Summits at the level of Prime Ministers. Having de-facto created its new format – WB6 at the level of PMs – we strongly support the all-inclusive character of regional cooperation. At the same time, we are open to supporting other initiatives for cooperation coming from within the region, particularly if they focus on concrete tangible results for the benefit of the citizens. Generally speaking, we believe in the complementarity of regional initiatives- if only, they help to maintain the dialogue. Given the region’s difficult historic legacy, this is not such a small thing.