EBRD and EU extend €25 million guarantee to Albania's Union Bank

The European Bank for Reconstruction and Development (EBRD) and the European Union are backing Albania’s Union Bank with an unfunded portfolio guarantee of up to €25 million to stimulate lending to small and medium-sized enterprises, including green projects, the EBRD announced. The guarantee will cover up to 50 percent of the credit risk on a new SME loan portfolio of up to €50 million that Union Bank will originate. The EU is providing first-loss risk cover of up to €2.5 million through the European Fund for Sustainable Development Plus, further strengthening the arrangement.

This marks the first portfolio risk-sharing project in Albania, building on the success of the Albania Agribusiness and Tourism Support Facility. The structure is designed to help banks lend more by reducing their risk exposure and freeing up their own liquidity for new loans, while addressing persistent gaps in SME financing.

At least 30 percent of the guaranteed funding will go to green projects aligned with the EBRD’s Green Economy Transition approach, supporting Albania’s shift toward a more sustainable economy. The EU is also funding technical cooperation to build capacity for implementing the project and the green transition. “By sharing risk and supporting green investments, we are helping to unlock new financing for SMEs and promote financial inclusion,” said Ekaterina Solovova, EBRD Head of Albania.

Ritva Heikkinen, Head of Cooperation at the EU Delegation to Albania, emphasized the EU’s commitment to Albania’s private sector as a driver of economic growth and job creation. “Through this guarantee, we are helping commercial banks to expand access to finance for SMEs—especially those of underserved businesses in rural Albania—while also promoting green and innovative investments that are fully aligned with the EU Green Agenda,” she said.

Union Bank CEO Flutura Veipi said the initiative strengthens the bank’s ability to offer broader and more affordable financing to Albanian SMEs, which remain the backbone of the economy. By dedicating a significant share to green investments, the bank is supporting businesses in their transition to more efficient and environmentally responsible practices. Union Bank specializes in SME and retail lending and has been a long-time EBRD client—the bank was an EBRD shareholder from 2008 to 2021. Since 1991, the EBRD has invested more than €2.4 billion in almost 180 projects across Albania.