Norway will provide Moldova with a 35 million euros grant for gas purchase, while the EBRD will provide an additional tranche of a 165 million euros loan for the same purpose.
The Ministry of Energy reported this, noting that at a meeting on Wednesday, the Moldovan government approved tax and customs privileges for the use by the state-owned company Energocom of a grant of 35 million euros, provided by the Norwegian government within the NANSEN program, as well as an additional tranche of a loan of 165 million euros from the European Bank for Reconstruction and Development (EBRD). The money will be used to purchase natural gas and will help reduce the purchase price of natural gas and, consequently, reduce the financial burden on end consumers. The provisions are included in the draft amendments to the law on exempting Energocom from the obligation to guarantee the loan repayment and on granting tax and customs privileges for the import and/or supply of goods and/or services intended for the implementation of Moldova Gas Security Supply Project. The Ministry of Energy notes that the EBRD loan is of Revolving type, and these funds can be used up to 3 times. The provided tax incentives will make it possible that import taxes and VAT will not be added to the final price of gas purchased and supplied by Energocom to Moldova, which will guarantee that these costs will not be included in the natural gas tariffs borne by end consumers. Earlier it was reported that the EBRD allocated 300 million euros in two tranches for the implementation of Moldova Gas Security Supply Project. These funds were used to purchase gas on the international markets before the heating season and have already been returned. Moldova and the EBRD later signed amendments to the loan agreement, which provide for a third tranche of a 165 million euros EBRD loan for the same purpose, which will complement the 34 million euros grant that the Norwegian government will provide to Moldova also for gas purchases through the NANSEN program, which provides support to Ukraine and neighboring countries affected by the war. These funds will ensure the financing and liquidity needs of Energocom and reduce the cost of borrowing. Moldova was selected to receive financial assistance under this program as a non-party to the conflict, which has been most affected by the crisis due to the war. The grant component is used to reduce the weighted average cost of purchased gas. Under Moldova Gas Security Supply Project it will be procured and stored natural gas in underground storage facilities in neighboring countries during the warm period of the year when the demand/price for natural gas is lower, and subsequently the gas will be resold to suppliers with public service liabilities under the existing legal framework. Natural gas will be procured through auctions conducted in accordance with the procedure established by the EBRD. // 31.01.2024 - InfoMarket
