Albania will use the World Bank as a warrantor to receive new loan

Albania will use the World Bank as a warrantor to receive new loan

The Albanian government will use another manner in lending to private institutions and banks in the international markets, by using the World Bank as a warrantor. The use of the World Bank as a warrantor will help Albania in taking a $250 ml loan from private entities in European financial markets. This type of procedure which has never been practiced by the Albanian government will be used to reduce the risks of a possible failure, officials say.

Until now, the government has followed only two ways in receiving or requesting for loans in the international market or to international institutions.  The first manner is the direct loan from development funding institutions as the World Bank, the International Monetary Fund or the European Bank for Development and Reconstruction. The second manner used by the government to receive loans has been through Eurobonds, as it happened in 2010.

Official data say that for the budget of this year, the deficit of Albania is predicted to reach the value of 58 billion ALL, but this is the new debt received by the government, which will be used to cover this year’s expenses.  But the government must also pay the outstanding debt of 300 ml euros inherited by Eurobonds received back in 2010.

It is now the board members of the World Bank which during this month, will take in consideration the request of the Albanian government and will decide if this institution can be used as a warrantor. The Albanian government is making this move, with the aim to reduce the amount of loans taken in the domestic market, officials declared.

News source/photo credits: Top Channel

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