The EBRD will provide Moldova with an additional 165 million euros loan for natural gas procurement.
This is stipulated in the draft ratification of amendments to the loan agreement between Moldova and the European Bank for Reconstruction and Development for the implementation of the "Moldova Gas Security Supply Project ", approved by the government. The agreement itself was signed on June 23, while the amendments to it were signed on October 13. The EBRD loan of 165 million euros will complement a grant of about 34 million euros, which the Norwegian government will allocate to Moldova through the NANSEN program, also for gas purchases. This additional loan and the grant to Moldova are meant for further lending to the state-owned energy trader Energocom in order to purchase gas from EU hubs. Earlier, the EBRD allocated 300 million euros to Moldova in two tranches for this purpose. These funds were used to purchase gas at favorable prices on the international markets in the period before the heating season and have already been returned. The third tranche of the EBRD loan of 165 million euros, which is now being disbursed, along with a grant component of 34 million euros from the Norwegian government, will meet Energocom's financing and liquidity needs and reduce its borrowing costs. The EBRD loan will be provided at a 6-month EURIBOR floating interest rate with a minimum of zero + a margin of 1% per annum. The one-time fee will be 1% of the maximum loan amount. Commitment fee: 0.5% per annum, calculated on the total outstanding loan amount. If the grant is accessed, there are no fees or interest associated with its use and the funds are non-repayable. The EBRD pointed out that the initial 300 million euros revolving loan in 2022 allowed Moldova to diversify its gas supply, meeting about 20% of demand last winter with supplies from the EU, compared to less than 5% in 2021. Moldova's gas imports have traditionally come from Russia, from Gazprom, with which it has a contract that expires in 2026 but is vulnerable to potential interruption as a result of the war in Ukraine. Increased EBRD funding now is planned to help bring Moldova's share of natural gas from Europe to at least 75% of purchases next winter. Natural gas accounts for just under a third of Moldova's energy consumption, and 70% of the country's gas is used in centralized heating. According to the EBRD, the aim is to ensure uninterrupted gas supply to Moldova and to protect the basic needs and economic livelihoods of its citizens. Gas prices reached record levels last winter, triggering an energy crisis exacerbated by the war. An initial loan to Moldova under the Bank's 2 billion euros resilience and livelihoods program supporting Ukraine and neighboring affected countries not only supported gas purchases, but also created a strategic stockpile of gas stored in Romania and Ukraine to avoid seasonal price spikes and improve energy security. Recent progress in implementing the EU's third energy package and the commissioning of the EBRD-financed gas pipeline between Romania and Moldova in 2021 means that Moldova now has the technical capacity to replace supplies from EU hubs in case of supply disruptions. The Moldovan government has authorized Energocom to purchase gas from alternative sources on the spot market, tendering mainly at the EU-Ukraine border. This allows the EBRD to lend directly to pre-qualified EU suppliers selected by Energocom and agreed with the EBRD in accordance with the EBRD's procurement rules. The transaction is structured to ensure full transparency and traceability of the loan proceeds. The EBRD is a leading institutional investor in Moldova and has invested over 2 billion euros in the country through 168 projects. It has also provided advisory services to more than 1,000 Moldovan firms to help them improve productivity and grow. // 29.11.2023 – InfoMarket
