Tirana, Albania/Washington DC, October 28, 2003.-
The EBRD and International Finance Corporation (IFC) are each acquiring a 19.5 percent stake in Albania’s largest insurance company, Instituti I Sigurimeve SH.A. (INSIG) to support its privatization.
The combined LEK 1.25 billion (€9.4 million) stake is the first of two major steps towards privatizing the company. The second, involving the sale of at least a 51 per cent stake to a strategic investor, through an international tender, with up to 9 per cent offered to the public, is expected to take place next year. The Central European Initiative is providing €500,000 in technical assistance that will support a significant transfer of insurance technology to the company and train its staff.
Kastriot Islami, Minister of Finance for Albania, said having IFC and the EBRD involved in the privatization process will promote the sale of INSIG in an open and transparent manner. By committing to improving the business climate, Albania hopes to attract more foreign investment, Mr. Islami added. In addition to supporting the privatization of a key Albanian company, the project will promote the development of the insurance sector in Kosovo, where INSIG also operates.
Khosrow Zamani, IFC’s Director for Southern Europe and Central Asia, noted: “This landmark operation will strengthen INSIG by improving its corporate governance, policies and procedures and will make it more attractive to potential strategic investors. It will also help restore confidence in the Albanian insurance system, enhance industry standards and competition in the local insurance sector.”
Kurt Geiger, Business Group Director for Financial Institutions at the EBRD, said the investment is important because it will strengthen both the company – ahead of its full privatization – and the country’s under-developed insurance sector. As well as increasing the range of products offered in Albania, the project will prepare for and encourage the privatization of other businesses in the country, Mr. Geiger added.
###
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $16.7 billion for its own account and $6.6 billion held for participants in loan syndications.
The EBRD, owned by 60 governments and two intergovernmental institutions, aims to foster the transition from centrally planned to market economies in central and eastern Europe and the Commonwealth of Independent States.
