TIRANA, June 10 – Albania has managed to secure a 650 million-euro Eurobond in international markets with a 7-year maturity raate and a 3.625 percent interest rate. The announcement was made by Prime Minister Edi Rama, who called the granting of the loan a ‘success’ and an indication that Albania is credible in international markets.
The Prime Minister said that Albania was offered 4.8 times more than it requested thanks to the credibility it has established due to reforms the government has undertaken.
“We have received confirmation from the markets. This makes us a reliable place, gives us the opportunity to expand our economy and financing base,” Rama said.
Minister of Finance and Economy, Anila Denaj and Minister of Reconstruction Arben Ahmetaj explained that 250 million euros of the loan will be used to repay previous debt from a Eurobond received in 2015, while 400 million euros to meet financing needs for 2020.
However, according to the opposition, the decision is “unthinkable” due to the country’s high level of public debt.
“With a debt level of 74 percent, 600 million euros which need to be repaid, with abusive concessions worth 2.2 billion euros and with the deepest economic crisis with a decrease of 9 percent, today [the government[ boasts that it is adding a new burden to every Albanian,” DP leader Lulzim Basha said. He pointed out that the loan comes at an inapproriate time due to the coronavirus, claiming that the government has already run businesses to the ground and left many Albanians unemployed.
Currently, Albania’s public debt is one of the highest in the Western Balkans region, reaching almost 10 billion euros and 12 billion euros including public-private partnerships. Last year, the World Bank warned of a high public debt in Albania and stated that a strong commitment of the Albanian government to comply with fiscal rules, is necessary to arrive at an acceptable debt target of 45 percent of GDP by 2025. However, debts have mounted up as the government is still repaying previous Eurobonds.
Albania addressed international markets in late 2015 when it managed to secure €450 million in a five-year Eurobond at a coupon rate of 5.75 percent, down from 7.5 percent in its inaugural €300 million Eurobond in 2010.
The country successfully tapped international markets to raise €500 million in its third ever Eurobond at an interest rate of 3.55 percent in 2018 as well, down by 2.2 percent compared to 2015.
