Page 72 - SE Outlook Regions 2022

Sejko also commented that the financial infrastructure of the banking
sector has been further consolidated over the last two years.

The Bank of Albania and the National Payment Systems Committee
have launched a national strategy for strengthening the small value
payment market and increasing the financial inclusion of citizens, with
the aim of doubling the number of citizens who have a bank account in
2023.

In late 2021, Hungary's largest lender OTP Bank signed an agreement
to acquire 100% of the Albanian subsidiary of Greece's Alpha Bank
from Alpha International Holdings Single Member for €55mn. Another
regional player may follow as Slovenia's largest bank Nova Ljubljanska
Banka (NLB) was reported in May to be mulling plans to enter the
Albanian market.

3.1.3 Industry

While the industrial sector revived after the initial spring 2020 lockdown,
towards the end of 2021 industrial companies were increasingly
affected by the international energy crisis.

An executive from steel and energy producer Kurum International
warned in a recent interview with Monitor.al that the energy crisis
makes its steel factory uncompetitive. The company’s economic
director Arif Shkalla added that overall, expectations for 2022 are “not
so good”.

Companies in the Balfin Group’s chrome mining and processing sectors
were negatively affected by the pandemic, and according to reports in
the Albanian media, Ballin is close to selling mining company
AlbChrome to Turkish Yildirim International Mining Investments.
AlbChrome is Albania’s biggest chrome ore producer and a major
producer of ferrochrome, used in the production of stainless steel. The
two companies reportedly aim to close the transaction in early 2022.

As elsewhere in the region, automotive components manufacturers are
suffering from the shortages of semiconductor chips, which has forced
automakers to cut production with a knock on effect on demand for
other components.

3.1.4 Energy & power

Albania produces virtually all of its electricity from hydropower, which
means it has a head start on its coal-dependent Western Balkan
neighbours when it comes to the green transition. The downside is
domestic electricity generation is dependent on precipitation, meaning
there are wide fluctuations in the level of production, requiring costly
power imports at times.

After his re-election in 2021, Albanian Prime Minister Edi Rama set the
goal of turning the country into a net electricity exporter. In the

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