The WB to provide Moldova with $134.3 million in emergency budget support to address economic challenges and build resilience.
Specifically, the World Bank's Board of Executive Directors has approved $134.3 million in financing for Moldova under Second Emergency Response, Resilience, and Competitiveness Development Policy Operation (DPO2). As noted by the WB report, this budget support will help the Moldovan government mitigate the social and economic impact of the Russian invasion of Ukraine, particularly on refugees and households. At the same time, this support is aimed at building resilience and enhancing competitiveness to reduce vulnerability to future shocks. The WB contribution notes that Moldova is currently facing unprecedented challenges as a result of the spillover effects of Russia's invasion of Ukraine, which are having a significant impact on households, the economy and public finances. The country has experienced a significant drop in gross domestic product due to disruptions in trade, remittances, the energy crisis and weather conditions related to climate change. These extraordinary circumstances, combined with financial constraints to support refugees and households and an unfinished development reform program, underscore the urgent need for support to address both the immediate challenges and long-term transformation in Moldova. To address these challenges, the OPD2 program focuses on providing legal status and support for the integration of Ukrainian refugees, improving social protection programs for households affected by Russia's invasion of Ukraine and the energy crisis. In addition, the program focuses on improving energy efficiency, strengthening the legal framework for deposit guarantees, corporate governance of state-owned enterprises, supporting the reorganization of the railroad sector, and facilitating the digitization of government services for businesses. "This emergency budget support that comes with contributions from our development partners will help the government of Moldova mitigate the ongoing impact of the Russia’s invasion of Ukraine on refugees and households severely affected by recent crises,” said Inguna Dobraja, World Bank Country Manager for Moldova. "I am also pleased that this program will promote resilience and competitiveness to reduce vulnerability to future shocks," she said. The program is part of a coordinated package of financial assistance to Moldova from international partners in response to the current socioeconomic emergency in the country. The package includes contributions from the IMF, the European Union and bilateral partners. OPD2 includes an IBRD loan of $100 million and a $9.3 million grant from the Multi-donor Trust Fund for Moldova's Development Policy Program (MDTF), as well as a $25 million concessional contribution from the FGFC. So far, contributions from the US, Norway, Ireland and Sweden have been received for the Moldova Development Policy Program. Additional support from partners is expected in the coming months, as well as parallel funding from the Japan International Cooperation Agency. Since Moldova joined the World Bank in 1992, more than $1.3 billion has been disbursed for more than 60 operations, and the World Bank portfolio now includes 11 active projects with a total commitment of $608 million. // 26.05.2023 - InfoMarket.
