Published on: 07 July 2014

The parliament examines the two agreements worth 220 million dollars for the financial sector

The Parliamentary Commission of Economy and Finance examined today the two agreements which are worth 220 million dollars and aim:

  • The Public Finance Development
  • Financial Sector Modernization

 

These agreements have been previously signed by the Minister of Finance and the World Bank representative in Tirana and they have been approved by the government. Currently the agreements are being discussed in the Parliament committees, while the loans will be allocated by the International Bank for Reconstruction and Development.

The loan interest rate is about 2%, which is more lenient than the bank loans in the private market that are over 5%, and the repayment time is long (23 years).

These agreements are the result of several important measures taken by the Albanian government for the improvement of macroeconomic and financial situation, such as:

  • Strengthening of public finances, not to create more hidden debts;
  • Acceleration of the pension reform, a safe and equal scheme;
  • Improvements in the energy sector, to avoid annual crises

 

The agreements came as result of the completion of a series of other measures taken in cooperation with the Bank of Albania that will lead to:

  • Reduction of the problematic loans
  • Strengthening the supervision of non-banking sector, especially that of the insurance market
  • Introduction of to micro-credit unions to the deposit insurance scheme that will help finance the expansion of the agricultural sector

 

"The signing of the two agreements today,  paves the way of receiving the considerable amount of 220 million dollars that will enable the final settlement of arrears without cutting public spending this year", stated the Minister of Finance, Mr. Shkëlqim Cani, in the Parliamentary Commission of Economy and Finance.

These agreements are just the beginning of a fruitful collaboration with the World Bank and many other important reforms will follow them in the sectors of:

  • Energy
  • Health
  • Registration of property
     

 

 

I Agreement

DEVELOPMENT OF PUBLIC FINANCE

87 million Euro

The purpose of granting this loan is to support and improve the fiscal sustainability reforms in Albania through strengthening the public financial management in the treatment of arrears, as well as through reforms in tax, pension and energy to support the macro-fiscal stability.  

The project will be implemented by the Ministry of Finance.

The project completion date is on  December 30, 2015.

 

II Agreement

FINANCIAL SECTOR MODERNIZATION

72.6 million Euro

The purpose of granting this loan is to support the reform of strengthening the regulatory and supervisory regime in the financial sector, as well as the mitigation of the main weaknesses of the banking and non-banking financial sector.

The project will be implemented by the Bank of Albania, the Financial Supervision Agency, Ministry of Finance, Ministry of Justice and the Deposit Insurance Agency.

The project completion date is on June 30, 2015.

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