Artan P쳮aska
apernaska@tiranatimes.com
Monday (4.05.2009), the Albanian government signed an agreement for a syndicate credit of 250 million Euros with Alpha Bank and Deutche Bank. The press reports that the credit will be given in two tranches. The first tranche consisting of 95 million Euros will be disbursed in May, and the second one consisting of 155 million Euros will be disbursed in June.
The local media estimates that this is the highest-interest debt ever contracted by the government.
In the first tranche, Piraeus Bank (Tirana Bank) joined with Alpha Bank and Deutche Bank as the joint lead arranger, contributing 20 million Euros while the National Commercial Bank joined with a contribution of 11 million Euros (Panorama, 5.05.2009). The second tranche is expected to bring a collaboration and interest from more banks.
While at first the press reported that there was no information on the interest rate, the first estimates guessed the interest rate to be nearing 7 % (Gazeta Shqip, 5.05.2009). But later leak-information gives an account of an actual 11.3 % interest rate (Gazeta Shqiptare, 6.05.2009). The newspaper believes the interest rate will be composed of a fixed 9.6 % rate + Euribor, which in the future, when Euribor rises, the interest rate might increase to an overall percentage potentially nearing 15 %. These are the highest terms in our public finance history, estimates Genc Kondi. The newspaper compared these interest rates and found them to be the double of those of the commercial credit of 230 million Euros contracted by the Albanian state in the former year (2008) by two Greek banks, in order to finance the construction of the Rr촨en – Kalimash road.
The credit is contracted to cover the state’s needs for capital expenditures in 2009, including financing the construction of the unfinished Rr촨en – Kalimash road.
The Finance Minister, Ridvan Bode, has declared that 150 million Euros will be consecrated to the construction of the road until June (Gazeta Shqiptare, 6.05.2009). That allows for another 100 million Euros out of the actual debt for still more unaccounted capital expenditures.
Meanwhile the Bank of Albania (BoA) estimates that capital expenditures have had a more sensible increase compared to a year ago. According to data from BoA, cited in the local press in March 2009 capital expenditures have more than tripled (Panorama, 5.05.2009).
