Moldova and the EIB will switch to different discount rates for loans for the Fruit Garden of Moldova project and road construction and repair projects.
Relevant amendments to the contracts on financing the named projects, which Moldova will sign with the European Investment Bank provide for this. On Wednesday, the Moldovan government approved the start of negotiations on them and the subsequent signing. Minister of Finance Veronica Sireteanu recalled that the Financial Conduct Authority (FCA) announced on March 5, 2021, that the LIBOR (London Interbank Offered Rate) will cease and lose its representativeness as of December 31, 2021 for currencies such as the pound sterling, the euro, the Swiss franc, the Japanese yen, and the U.S. dollar for loans with maturities of 1 week and 2 months, and immediately after June 30, 2023, for other U.S. dollar loan maturities. In this context, the European Investment Bank prepared amendments and additions to the previously signed financing agreements between Moldova and the EIB for the implementation of the Fruit Garden of Moldova project and the project for road construction and rehabilitation in the Republic of Moldova. The amendments contain a provision on the change of the base interest rate and transition for dollars - from LIBOR to SOFR (the "benchmark" interest rate in the money market in dollars, which represents the median rate weighted by the volume of overnight transactions of 3 different types of repo with the US Treasury's government securities security), and for sterling - from LIBOR to SONIA ("benchmark" interest rate in the sterling money market, which is the weighted average rate on borrowing by banks of Great Britain from financial institutions on the "overnight" terms). The changes made to the agreements are of a technical nature. // 14.06.2023 – InfoMarket
