Moldova will receive a 15 million euros loan from the EBRD for the implementation of the Thermal Energy System Project in Balti - Phase II (CET-Nord).
This is stipulated in the relevant loan agreement between Moldova and the European Bank for Reconstruction and Development, ratified by the Parliament on Thursday. The agreement was signed in Chisinau on December 24, 2021. According to Deputy Prime Minister, Minister of Infrastructure and Regional Development Andrei Spinu, the total value of the second phase of the Balti (CET-Nord) thermal energy system project amounts to 17 million euros. To implement the project, Moldova will take a 15 million euros loan from the EBRD, of which 14 million euros will be a sovereign loan from the EBRD and 1 million euros - a preferential loan from the Green Climate Fund - GCF. 9.5 million euros (8.5 million euros - sovereign loan from EBRD and 1 million euros - concessional loan from GCF) will be spent on implementation of the priority investment component, and 5.5 million euros - on refinancing of the historical debt. The loan will also be complemented by a 2 million euros investment grant from the Eastern Europe Energy Efficiency and Environment Partnership (E5P) Fund. The EBRD sovereign loan will be granted for a period of 15 years with 3-year repayment vacations. The interest rate will be: 6-month EURIBOR with a margin + 1% per year for the EBRD loan, and no interest rate will be applied to the EBRD-GCF loan.. The single fee will be 1% of the maximum amount of the EBRD loan. However, no single commission will be charged on the EBRD-GCF loan. The commitment fee will be: 0.5% per year on the total outstanding amount of the first and second tranches of the EBRD loan, and 0.15% per year on the total outstanding amount of the GCF loan. The service charge will be 0.25% per year on the principal amount of the GCF loan, and there will be no service charge on the EBRD loan (first and second tranches). The project aims to improve the quality of service to residents through the rehabilitation of the hot water system, the introduction of horizontal intra-block distribution system, providing thermal comfort in buildings through individual control of heat consumption, optimizing operating costs, control and monitoring of centralized / remote, increase the life of the machines / equipment, reducing heat losses, etc. At the same time, while taking into account the unresolved issue regarding the historical debt for natural gas to "Balti Gas", a subsidiary of "Moldovagaz" SA group, the feasibility study considered and determined the most feasible solution for reimbursement of the historical debt. Given the preferential terms of EBRD loans, compared to the offers of the financial market in Moldova, the re-crediting of the sovereign loan provided by the EBRD was found to be the most appropriate solution. Thus, the second tranche of up to 5.5 million euros will help repay CET-Nord's historical gas debt, allowing the company to operate at full capacity, decide on the best use of cash flow and increase its financial stability. // 14.04.2022 - InfoMarket
