1. Working with the EBRD UK-Albania Trade and Investment Forum
November 2014

2. What is the EBRD?
Introduction to EBRD
Case studies
International financial institution, promotes transition to market economies in 35 countries from central Europe to central Asia and the Southern and Eastern Mediterranean – SEMED region)
Owned by 65* countries and two inter-governmental institutions.
Capital base of €30 billion.
Invested over €86 billion in more than 4,007 projects since 1991
Cumulative business volume of €86bn
Note: Unaudited as at 30 April 2014
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© European Bank for Reconstruction and Development 2012

3. Where we invest
EBRD Classification:  INTERNAL
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4. EBRD finances diverse range of enterprises
Introduction to EBRD
Case studies
Net cumulative business volume €86bn
Note: Unaudited as at 30 April 2014
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© European Bank for Reconstruction and Development 2012

5. The EBRD and its objectives
Introduction to EBRD
Case studies
The EBRD is:
Your engaged partner
Operates in “business time”
Private sector focused
Wide product, currency, tenor range
Facilitates inward and cross border investments in the region
Promotes policy dialogue with regards to investment climate business environment and policy matter
AAA rating profitable, commercial focus
Objectives:
To promote transition to market economies by investing mainly in the private sector
To mobilise significant foreign direct investment
To support privatisation, restructuring and better municipal services to improve people’s lives
To encourage environmentally sound and sustainable development
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© European Bank for Reconstruction and Development 2012

6. EBRD Product Flexibility tailored to project needs
Introduction to EBRD
Case studies
Equity
Common stock or preferred
Minority position only (up to 35%)
Mezzanine
Other
guarantees
currency swaps
Loans
Senior, subordinated, convertible
LT (up to 10y or more) or ST revolving
Floating/ Fixed rates
Choice of currencies (€, US$, RUB etc.)
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© European Bank for Reconstruction and Development 2012

7. Key strengths of EBRD Operational
Introduction to EBRD
Case studies
Operational
Extensive knowledge of local economy, business environment and practices, local presence
Engaged minority partner for business
A business partner who shares risks, including political
Catalyst to access additional equity, debt and trade finance
Provides finance to both private and public sector clients
High standards for corporate governance and compliance
Institutional
Strong, internationally recognized financial partner with long-term perspective
Close working relationships with governments and shareholders
Political leverage due to EBRD’s unique mandate and shareholder structure
Preferred Creditor Status
AAA credit rating
Work closely with market sources of capital to fill “market gaps”
19 September, 2018
© European Bank for Reconstruction and Development 2012

8. Albania – Key Economic Indicators
Albania has become an EU candidate in June This outcome reflects the country’s progress in recent years in political and economic reform as well as the EU’s continued commitment to support Albania in its efforts. EU’s IPA funds to Albania are set at 650 EUR million for the EU’s budget period (10% increase in comparison to the period ), and the country will also have access to about 3 EUR billion of multi-beneficiary funds.
1.7% real GDP growth expected in 2014 – Economic performance remains weak for Albania's convergence potential, reflecting domestic problems and difficulties in trading partners (especially Italy and Greece).
Inflation below the official target of 3% +/- 1p.p. In line with the subdued inflation rate, the Bank of Albania has implemented an expansionary monetary policy – bringing the reference rate down to an historic low of 2.5 per cent.
Public debt is expected to peak around 73% of GDP next year.
A new €331 million IMF programme has been agreed in February This is complemented by two World Bank (WB) development policy loans of US$ 220 million, which aim to strengthen public financial management and maintain stability in the financial sector. In Sept 2014, the WB approved additional US$150 million for improving stability of Albania’s energy sector.
On 10 October 2014, S&P revised Albania’s B rating from Stable to Positive outlook . Moody’s ratings is at B1 with stable outlook.
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© European Bank for Reconstruction and Development 2012

9. Albania - Ease of doing business
The overall positive direction of business environment reforms is highlighted by Albania’s significant jump in the World Bank Doing Business report. The country climbed 40 positions, ranking 68th out of 189 countries for ease of doing business. However, significant challenges remain.
SOUTH-EASTERN EUROPE
ALBANIA
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© European Bank for Reconstruction and Development 2012

10. Legal and Regulatory Reform to Help Improve the Investment Climate
EBRD’s Investment Climate and Governance Initiative (ICGI) : An ambitious programme to
help improve the business climate,
strengthen legal framework and mechanisms of dispute resolution
enhance transparency, combat corruption and promote good governance
EBRD and Government of Albania have signed a MoU on 24 Feb 2014 to provide the framework for the implementation of this initiative.
One example: Establishment of the Investment Council (IC), an independent body to facilitate dialogue between the government and the private sector. Ultimate goal is improvement of business climate in Albania working closely and strengthening the National Economic Council (NEC) established by the government.
Further areas of legal and regulatory reforms with EBRD engagement:
Telecoms regulatory reform – new strategy and new law
Financial Supervisory Authority assistance
Corporate reform, law on bond issuance
Fiscal Decentralization to allow municipalities and municipal utilities (at the right moment) to start borrowing
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© European Bank for Reconstruction and Development 2012

11. EBRD in Albania
Active in Albania since 1992
Total commitment of € 906 million
EBRD financing augmented by private and public contribution – approximately € 2.5 billion linked to EBRD projects
Portfolio is composed of circa 55% public sector and 45% private sector investments
In the Public sector, helping Albania with major investments such as highways, dams, electricity distribution and other major projects that directly impact the development of the country
EBRD has supported the largest companies, in strategic sectors, such as:
Bankers Petroleum
Tirana East Gate
Hygeia Hospital
Antea Cement
Privatization of the Tirana Airport
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© European Bank for Reconstruction and Development 2012

12. Albanian Deposit Insurance Agency
Client
Albanian Deposit Insurance Agency
EBRD Finance
EUR 100 million standby credit line, covered by a sovereign guarantee
Use of Proceeds
Proceeds of the credit line can be used by ADIA for the purpose of making funds available to pay out insured depositors in accordance with provisions of the Law on Deposit Insurance.
Context
Albania’s need for a modern well-functioning financial system. The project is even more relevant after the banking crisis, to ensure that the banking system remains sound and liquid.
EBRD value added
A well-functioning deposit insurance scheme is an important part of a well-functioning financial sector. The support of EBRD is highly additional in that it will provide long term financing with a flexible structure which is currently not available in the market and which would fit the purpose and needs of the Agency.
Signed in
2014
19 September, 2018
© European Bank for Reconstruction and Development 2012

13. 2009 Tirana East Gate Signed in Borrower
Tirana East Gate Sh.p.k, a shopping mall established in Tirana, Albania
EBRD finance
Total €17 million loan, including a €7 million mezzanine loan
Tenor
9 years, originally 7 years
Use of proceeds
Construction and development of TEG, the largest shopping mall in Albania.
EBRD Value Added
Scarcity of long-term investment resources in the Albanian market, as well as adoption of applicable corporate governance and financial reporting standards;
Signed in
2009
19 September, 2018
© European Bank for Reconstruction and Development 2012

14. Hygeia Hospital Tirana
Client
Hygeia Hospital Tirana, part of the Hygeia Group (a leading health care provider in Greece)
EBRD Finance
EUR 10 million senior loan. The Black Sea Trade and Development Bank has provided a parallel loan of EUR 10 million.
Use of Proceeds
The construction and operation of a greenfield private hospital in Tirana designed for 220 beds and initially operating with 120 beds.
Context
Albania’s need for modern, high quality and comprehensive medical services. The hospital provides a wide range of services and technologies, some of which were previously unavailable in Albania, e.g. linear accelerators.
EBRD value added
The hospital represents the largest private health care investment in Albania to date and one of the largest direct investments in the country. The Bank’s role was instrumental due to the limited availability of long-term financing in Albania and the greenfield nature of the project.
Signed in
2010
19 September, 2018
19 September, 2018
© European Bank for Reconstruction and Development 2012

15. Bankers Petroleum - Albania
Borrower
Bankers Petroleum Albania Ltd., subsidiary of Bankers Petroleum Ltd. in Canada
EBRD Finance
USD 55 million loan, USD 9.5 million in equity investment
Tenor
7 years
Co-financing
USD 130 million with IFC (International Finance Corporation) on a basis
Use of Proceeds
Development and remediation of the Patos Marinza oil field in Albania
EBRD Value Added
$5 million loan allocated to support the redevelopment & environmental remediation of the area
Signed in
2009
19 September, 2018
© European Bank for Reconstruction and Development 2012

16. How to work with EBRD in Albania
Directly:
Local Enterprise Facility (LEF) - A delegated facility for equity and quasi-equity investments, as well as tailor-made debt financing. Established jointly by the EBRD and the Italian Government in Individual investments between €1 mil to €10 mil.
Western Balkans Sustainable Energy Direct Financing Facility (WBSEDFF) - A direct financing facility operated by the EBRD for (small) renewable energy and (industrial) energy efficiency projects. Senior loans and project financing arrangements from EUR 2 million to EUR 6 million.
Western Balkans Enterprise Expansion Fund (ENEF) - A fund for equity and quasi-equity finance established jointly by the EBRD, EU, EIF and DEG in A total of EUR 77 million of initial capital.
Indirectly:
Medium-Sized Co-financing Facility (MCFF) – Financing of medium-sized private companies. EBRD co-financing takes the form of funded or unfunded risk participation by the EBRD. The MCFF offers local partner banks a combination of credit lines with a full recourse to the PB and a risk-sharing participation in sub-loans where EBRD takes risk of the ultimate borrowing enterprise.
Western Balkans Municipal Infrastructure Development Fund (MIDF) - An innovative financing vehicle established by EBRD and KfW, dedicated to provide debt financing for municipal infrastructure projects in the Western Balkans. Operations through local commercial banks by providing funded and unfunded risk sharing and credit lines. Loans between EUR 100,000 and EUR 5 million. Total capital EUR 100 million.
Western Balkans Women in Business Facility - EUR 20 million under which credit lines will be provided by EBRD to eligible Participating Financial Institutions for on-lending to women owned and managed MSMEs.
19 September, 2018
© European Bank for Reconstruction and Development 2012

17. Key strengths of EBRD Operational
Introduction to EBRD
Case studies
Operational
Extensive knowledge of local economy, business environment and practices, local presence
Engaged minority partner for business
A business partner who shares risks, including political
Catalyst to access additional equity, debt and trade finance
Provides finance to both private and public sector clients
High standards for corporate governance and compliance
Institutional
Strong, internationally recognized financial partner with long-term perspective
Close working relationships with governments and shareholders
Political leverage due to EBRD’s unique mandate and shareholder structure
Preferred Creditor Status
AAA credit rating
Work closely with market sources of capital to fill “market gaps”
19 September, 2018
© European Bank for Reconstruction and Development 2012

18. Contacts For all further enquiries, please contact:
Holger Muent Director, Western Balkans Tel: EBRD, One Exchange Square London, EC2A 2JN UK
Christoph Denk Head of Office (from 17/11/14) EBRD Tirana Resident Office Torre Drin Building, 4th Floor Tel:
19 September, 2018
@European Bank for Reconstruction & Development