Moldova will need about $39 billion in investments by 2050 to implement a “green” transition and increase resilience to climate change.
Another $8 billion will be needed to achieve net zero emissions. This is stated in the Climate and Development Report for Moldova, prepared by the World Bank Group. WB experts note that to finance these investments, Moldova can implement progressive tax reforms, increase public spending, introduce carbon pricing, and include climate change issues in public finance. Financing climate change mitigation measures partly from public resources will lead to an increase in the public debt-to-GDP ratio. However, public financing alone will not be enough and Moldova will also have to mobilize financing, including from development partners and the private sector. Modelling in one scenario suggests that around 2/3 of the funding will need to come from the private sector, and accelerating climate-smart private investment will require improving the business environment, increasing productivity and skills, stimulating competition and upgrading skills, stimulating competition in SOE-dominated sectors, and accelerating reforms to harmonise trade with the EU. In the energy sector, de-risking mechanisms, standardisation of power purchase agreements, guarantees and blended finance supported by development finance institutions are planned to help attract private investment, including pilot projects for utility-scale renewable energy, as well as scaling up green finance and attracting foreign direct investment. Expanding green finance, attracting foreign direct investment and access to grants and concessional finance from the EU and development partners are also critical, especially to finance the surge in investment in the near term. Moldova is expected to receive grants and concessional loans to support preparations for EU accession, stimulate economic growth and accelerate socio-economic convergence. Increasing the share of grants and concessional financing from development partners could reduce the public debt-to-GDP ratio. // 30.01.2025 — InfoMarket
