Increasing energy efficiency in Moldovan industry

It is a hot summer day in Orhei, a charming rural town 50 km from the Moldovan capital, Chisinau. It is not yet 10am and the temperature has already reached 28 degrees Celsius, so attending the launch of a brand new boiler room producing heat and steam might not sound too appealing.

But there is genuine excitement among visitors to Orhei-Vit – Moldova’s largest producer and exporter of fruit juice and canned vegetables – as General Director Stefan Golubciuc shows them the shiny pipes and huge tanks of his company’s recently-completed steam-generating facility and it is officially switched on.

The contrast with the old boilers is striking and entirely explains Mr Golubciuc’s urge to start using the new equipment as soon as possible. The rusty 30-year old machinery used until now is so damaged that one person had the job of mopping up water and oil from the leaking pipes.

The energy conundrum in Moldova

This scenario is familiar to anyone working in Moldova’s industries, the large majority of which were established in Soviet times and have not been upgraded or properly maintained since the end of that era. Moldova holds the regrettable distinction of being the least energy-efficient nation in Europe. At the same time, Moldova depends almost entirely on energy imports, and energy prices in the country – the highest in the CIS – match the EU average.

Improving industrial energy efficiency is thus a matter of critical importance. The problem is that it requires access to substantial funding and expert technical support, which is not easy in Moldova due to its overall lack of development and that of its financial sector in particular.

But with help from the EBRD things are changing. To improve the country’s record on energy efficiency, the Bank has established the Moldovan Sustainable Energy Financing Facility (MoSEFF). This is a €20 million credit line to partner banks for on-lending to private enterprises that, like Orhei-Vit wish to invest in energy-saving and more environmentally-friendly technology.

Fundamental to the success of the facility is the EU-funded free technical assistance provided for each project. MoSEFF energy consultants advise clients on what energy improvements can be made and how they should be implemented.

Cutting energy costs and CO2 emissions

“Steam plays a crucial role in fruit and vegetable processing” Mr Golubciuc explains. “Considering our high energy losses due to obsolete equipment and the impact on the environment, we realised we needed a modern energy-saving system to produce and use steam”.

“MoSEFF offered us an easy way to access financing,” he added. “We were able to apply for a loan under conditions that are fairly simple.” The €520,000 invested in replacing the Soviet-era boilers will pay for itself in a few years thanks to a 24 per cent reduction in energy costs. CO2 emissions are expected to fall by the same proportion.

There are many other benefits too. The Orhei-Vit project, MoSEFF’s largest to date, sets an example for other industries and increases their awareness of sustainable energy issues. It is not by chance that the new boiler launch at Orhei-Vit was attended by the Agriculture and Food Industry Minister, Vasile Bumacov, as well as by local TV and newspapers.

Furthermore, Orhei-Vit’s reduced energy costs mean it can invest more in production which will boost demand for fruit and vegetables grown by local farmers. And the efficiency cycle started by the new boilers doesn’t stop there: Mr Golubciuc is planning to convert the old boiler room into a recycling point for organic waste which will then be used to fertilise local farms.

“Many other Moldovan enterprises are now taking part in the MoSEFF programme,” says Alex Bologa, a MoSEFF energy audit expert. “They realise that becoming energy efficient means improving their image and being more competitive on the market. MoSEFF has gained momentum and is rapidly spreading across the country.”

By Lucia Sconosciuto

MoSEFF is only one example of the many successful Sustainable Energy Financing Facilities (SEFFs) that the EBRD has already established in 15 countries. The Bank  is committed to expanding SEFFs throughout its region of operations, providing financing and technical assistance to support sustainable energy projects and to protect the environment.

Last updated 16 September 2011