The European Bank for Reconstruction and Development (EBRD) is partnering with the European Union (EU) to enhance access to finance for small and medium-sized enterprises (SMEs) in Albania, the EBRD said in a press release on Tuesday.

The EBRD is providing a guarantee of up to Euro 25 million to ProCredit Bank Albania to support up to Euro 50 million in new lending. Under the agreement, the Bank will provide an unfunded guarantee covering 50% of the credit risk of a newly originated SME loan portfolio of up to Euro 50 million.

The transaction is designed to provide capital relief to ProCredit Bank Albania, enabling it to deploy additional liquidity into new lending and to expand financing for businesses across the country. The facility is the EBRD’s second portfolio risk-sharing transaction in Albania, expanding the range of financial instruments available to support private sector development and financial inclusion in the country.

The financing will target SMEs across the country, with a particular focus on underserved segments, including businesses led or owned by women and young entrepreneurs, companies operating outside the capital, Tirana, and firms active in vital sectors such as agribusiness and tourism.

In line with the EBRD’s Green Economy Transition (GET) approach, 50 per cent of the EBRD-guaranteed share of the portfolio will be allocated to eligible green investments, supporting businesses investing in energy efficiency and other sustainable technologies.

The project will also benefit from a technical cooperation package, funded by the EU under the EFSD+ framework, to support capacity building for the implementation of the project and green economy transition.

Ekaterina Solovova, EBRD Head of Albania, said: “SMEs are the backbone of Albania’s economy, yet many still face challenges in securing the financing needed to grow. This is why the EBRD, in partnership with the EU, designed this risk-sharing facility, which will help unlock new lending to small businesses across the country, supporting entrepreneurship, innovation, and job creation.”

Silvio Gonzato, the EU Ambassador to Albania, said: “The Albanian economy is built on the success of small and medium-sized enterprises. Their continued growth depends on access to finance, and the EU is proud to support this through the EFSD+. The latter promotes sustainable investment by providing a range of risk-sharing instruments across the Western Balkans. Both ProCredit Bank and the EBRD are highly experienced and trusted partners with a strong track record of supporting Albanian businesses.”

The EBRD is a leading institutional investor in Albania and has invested almost Euro 2.5 billion in the country by way of over 180 projects to date.