World Bank loan helps Albanian business environment

TIRANA, Nov. 27 – On Monday, the World Bank and Albania signed a $9.3 million loan to help Albania attract investment and promote the export-led private sector. The deal was signed by the Albanian Finance Minister Ridvan Bode and the World Bank representative in Albania Nadir Mohammed.
The project, which will also be funded with half a million dollars from the Albanian government, would support the government’s efforts to strengthen the public sector’s capacity to improve the business environment, attracting investments and narrowing the import-export gap, according to a statement. Albania’s imports continue to increase, while exports are low.
“Such an agreement makes it possible to avoid the administrative barriers in facilitating business access to the market, to lift monopolies, bureaucracy that exists now in issuing licenses and patents and making the Albanian environment and institutions in general more attractive and friendly to business,” said Bode.
“Albania was included today in the IBRD group and that means it is included in the group of the countries relatively developed but it is also a proof of the fact that Albania is a country that may take loans. And I think that is a great achievement for the country because it opens a new window and offers new possibilities for a greater access to more funds from the World Bank,” said Mohammed.
The Albanian business environment is hampered by unfair competition and regulatory practices, as well as bureaucratic and administrative barriers. The project will try to reduce costs, time and the number of steps necessary for businesses to comply with regulations affecting business entry and operations.
The Albanian government will also take part, investing half a million dollars in the project, which is to last until 2011. The loan from IDA has a 20 year maturity, including 10 year grace period and a 0.75 percent annual interest rate. The loan from IBRD has 17 years maturity, with four years of grace period, and a 0.75 percent annual interest plus one percent of LIBOR. The project was coordinated by the European Commission, USAID, FIAS, and SECO, who will also assist with funding during the Stabilization and Association Agreement process.