Moldova will begin negotiations with France on a €25 million credit line to assist the country in green energy transition
The Moldovan government has approved an agreement to begin negotiations with the French Development Agency on the implementation of a €25 million project entitled “Green Energy Transition Program.” The negotiating team includes five representatives from ministries and departments and will be headed by State Secretary of the Ministry of Finance Ion Gumene. As previously noted, the loan will have a term of 15 years, including a grace period of five years. The loan will be repaid in 20 equal installments twice a year. The interest rate will be chosen at the time of disbursement between a fixed interest rate or a floating rate (Euribor 6m + margin 0.9 percentage points). The commitment fee will be 0.5% of the outstanding amount starting from the date of signing the agreement, and the one-time fee will be 0.5% of the total loan amount. The loan servicing costs will be covered by the state budget. The purpose of the credit line agreement is to finance the state budget needs and to support reforms in Moldova's energy sector that will contribute to strengthening energy security and promoting the process of convergence with EU standards. Targeted interventions are aimed at facilitating the transition to a more sustainable and environmentally friendly energy system through infrastructure modernization, energy efficiency improvements, renewable energy development, consumer protection, and the promotion of environmental policies and climate change mitigation. The credit line agreement implements the provisions of the Memorandum of Understanding signed on June 23, 2023, between the Government of Moldova and the French Development Agency to promote the energy sector's transition to a green economy in Moldova. The policy reform measures to be implemented under the program are aimed at implementing and ensuring the implementation of the reform agenda for the green transition in the energy sector, supporting efforts to bring Moldova into line with European legislation, creating a regulatory framework that provides incentives for additional investment in climate change and environmental protection, and strengthening renewable energy production capacity and security of supply. On February 10, 2023, the Ministry sent a request to the French Development Agency to consider granting a €120 million loan on preferential terms to support the implementation of reforms in the energy and forestry sectors. As a result, on June 23, 2023, a Memorandum of Understanding on “Green Reform for Moldova” was signed between the Government of Moldova and the French Development Agency. This memorandum establishes a general framework for cooperation and sets out a roadmap for the implementation of agreed reforms. The document consists of six main stages, each with specific objectives, and includes a total of 34 policy reform measures. The credit line agreement, which is to be obtained, concerns Phase II of this reform program. The first tranche of the program (€40 million) was successfully implemented in 2023, paving the way for the approval of the second tranche in 2024 (€25 million), which was disbursed in 2024. Subsequent stages, including the current Stage 3, will follow on an annual cycle for 2025-2028, with disbursement of funds conditional on the implementation of actions specified in the Memorandum of Understanding and in the draft loan agreement. // 21.07.2025 — InfoMarket
