The EBRD will provide Moldova with a loan of 15 million euros for the implementation of the II stage of the project “Thermal power system of Balti municipality (CET-Nord)”.
This is provided for by a corresponding loan agreement between Moldova and the European Bank for Reconstruction and Development, which was signed in Chisinau on December 24, 2021, and now the government of the Republic of Moldova has approved its ratification. The total cost of the second phase of the project will be 17 million euros. To implement this project, Moldova will attract a loan of 15 million euros from the EBRD, of which 14 million euros will be a loan from the EBRD, and 1 million euros will be a concessional loan from the Green Climate Fund - GCF. At the same time, 9.5 million euros (8.5 million euros - a loan from the EBRD and 1 million euros - a soft loan from the Green Climate Fund) will go to the implementation of the priority investment component, and 5.5 million euros - to refinance historical debt. The loan will also be complemented by a €2 million investment grant from the Eastern European Energy Efficiency and Environment Partnership (E5P) Fund. The EBRD loan will be allocated for a period of 15 years with a 3-year repayment holiday. The interest rate will be: 6-month EURIBOR with a margin of +1% per year on the EBRD loan, and no interest rate will be applied on the EBRD-GCF loan. The single fee will be 1% of the maximum EBRD loan amount. Herewith, a single commission will not be charged on the EBRD-GCF loan. The commitment fee will be 0.5% per annum on the total outstanding amount of the first and second tranches of the EBRD loan, and 0.15% per annum on the total outstanding amount of the GCF loan. The maintenance fee will be 0.25% per annum of the principal amount of the GCF loan, and there will be no maintenance fee for the EBRD loan (first and second tranches). The second stage of the project “Heat power system of Balti municipality (CET-Nord)" aims to implement a program of priority investments identified in a feasibility study funded by the EBRD and developed by the French consulting company Seureca-Veolia. The components of the priority investment program for the new project were: supply and installation of individual heat substations; introduction of a horizontal system for the distribution of heat carrier and hot water inside residential buildings; construction of a reservoir for storing heat energy (at the level of a centralized heat supply system); modernization of water treatment facilities; implementation of the SCADA system; providing software for thermal-hydraulic modeling. The project aims to improve the quality of service for residents by restoring the hot water supply system, introducing a horizontal intra-quarter distribution system, ensuring thermal comfort in buildings through individual heat consumption management, optimizing operating costs, centralized/remote control and monitoring, increasing the service life of machinery/equipment, reducing thermal energy losses, etc. At the same time, taking into account the existence of an unresolved issue with the historical debt for natural gas to the Balti-Gaz company from the Moldovagaz group, during the feasibility study, the most expedient solution for reimbursing the historical debt was considered and determined. Taking into account the preferential conditions for granting EBRD loans, in comparison with the offers of the financial market in Moldova, the most acceptable solution was the re-crediting of the EBRD loan. Thus, the second tranche of up to EUR 5.5 million will help pay off CET-Nord's historical gas debt, allowing it to operate at full capacity, decide on the best use of cash flows and improve its financial stability.// 30.03.2022 — InfoMarket
