The EBRD and Norway will provide Moldova with an additional financing package of €199 million for the purchase of natural gas.
As noted in a statement from the European Bank for Reconstruction and Development, the EBRD is expanding its financing for Moldova to acquire strategic gas reserves with a new €199 million package, which includes a €165 million EBRD loan and a €34 million grant from Norway. As the EBRD notes, thus, the total amount of funds allocated by the EBRD to Moldova for gas purchases since the beginning of the war in Ukraine amounted to almost 500 million euros, which made it possible to ensure the energy security of the Republic of Moldova. The EBRD reported that the loan and grant to Moldova are intended for further lending to the state energy trader Energocom for gas purchases in EU hubs. The loan agreement was signed by the Minister of Energy of Moldova, Victor Parlicov, and the EBRD Vice-President for Policy and Partnerships, Mark Bowman, as part of their participation in the fourth meeting of the Moldova Support Platform. The EBRD indicated that an initial revolving loan of €300 million in 2022 allowed Moldova to diversify its gas supplies, meeting about 20% of demand last winter with supplies from the European Union, compared to less than 5% in 2021. Gas imports Moldova's supply has traditionally come from Russia, from Gazprom, which has a contract that expires in 2026 but is vulnerable to potential interruption as a result of the war in Ukraine. It is planned that increased EBRD funding now will help bring the share of European natural gas in Moldova to at least 75% of purchases next winter. Natural gas makes up just under a third of Moldova's energy consumption, and 70% of the country's gas is used in district heating for the country's 2.7 million citizens and about 100 thousand Ukrainian refugees who settled in our country after the Russian invasion of Ukraine in February 2022. As noted at the EBRD, the goal is to ensure uninterrupted gas supplies to Moldova and protect the basic needs and economic livelihoods of its citizens. Gas prices reached record levels last winter, triggering an energy crisis worsened by the war. The initial loan to Moldova under the bank's €2 billion resilience and livelihoods program supporting Ukraine and neighboring affected countries not only supported gas purchases, but also created a strategic gas reserve held in Romania and Ukraine to avoid seasonal price surges and improve energy security. Recent progress in implementing the EU's third energy package and the commissioning of the Romania-Moldova gas pipeline in 2021, which was financed by the EBRD, means that Moldova now has the technical capacity to substitute supplies from EU hubs in the event of supply disruptions. The Government of Moldova allowed Energocom to purchase gas from alternative sources on the spot market, holding tenders mainly on the borders of the EU and Ukraine. This allows the EBRD to provide credit directly to pre-qualified EU suppliers selected by Energocom and agreed to by the EBRD in accordance with the EBRD's procurement rules. The transaction is structured to ensure full transparency and traceability of loan proceeds. The EBRD is the leading institutional investor in Moldova and has invested more than €2 billion in the country through 168 projects. It has also provided consulting services to more than 1,000 Moldovan firms to help them improve productivity and grow. The EBRD's focus in Moldova is on creating an environment that supports private sector activity, promoting European standards across all sectors and regional integration to bring domestic producers closer to their markets, and developing efficient and sustainable utilities that have a direct impact on people's lives.// 20.10.2023 — InfoMarket
