The French Development Agency (AFD) will provide Moldova with a loan of 40 million euros to reform the energy sector and develop climate resilience.
The Government at its meeting on Wednesday approved the start of negotiations on the draft of the relevant Credit Line Agreement between Moldova and the French Development Agency, approving the composition of the negotiating delegation. The purpose of the agreement is to finance the needs of the state budget for the implementation of reforms in the field of energy infrastructure, energy efficiency, renewable energy. Also, the loan funds will be used to transition Moldova to "green energy", contributing to energy security and long-term development, resilience to climate change, in accordance with the requirements of EU and Energy Community legislation, as well as Moldova's obligations under major international agreements, including the Paris Agreement. The credit line will make it possible to implement some of the provisions of the Memorandum of Understanding signed by the Moldovan government with the French Development Agency on June 23 this year. As noted in the Ministry of Finance, on February 10, 2023, the agency asked the French Development Agency to explore the possibility of providing a loan based on a development policy in the amount of 120 million euros on favorable terms to carry out reforms in the field of energy and forestry. On May 15, 2023, the first draft of the Credit Line Agreement in the amount of 40 million euros was received from French partners, subject to reforms in the energy sector. Relevant reforms should be carried out on the basis of the Policy Matrix (“Roadmap”). It includes all actions to be implemented by Moldova in the period 2023-2028. It's about 34 conditions, divided into 6 stages. The loan agreement to be entered into with the French Development Agency is a bilateral contract. The loan has a maturity of 15 years, including a 5-year grace period. The loan will be repaid every six months in 20 equal installments. The interest rate will be determined in the course of negotiations between a fixed interest rate or a floating rate (Euribor 6 months + margin). The commitment fee is expected to be 0.5% of the outstanding amount accrued since the date of signing the contract. A single commission will be 0.5% of the total loan amount. The loan will be disbursed in one payment. The cost of servicing this loan is paid from the state budget. So far, two loan agreements have been signed between Moldova and the French Development Agency on the allocation of 75 million euros in the form of budgetary support. //26.07.2023 – InfoMarket.
