The EBRD is supporting the modernisation of Moldova’s power sector with a US$ 20 million sovereign loan to benefit Moldelectrica, state-owned energy transmission company, to finance the upgrade of the country’s transmission network.
Moldova is almost completely dependent on imports of primary energy (natural gas) for the production of electricity and security of supply is a key concern for the country’s power sector. The Moldovan transmission network is connected to Ukraine and Romania and strengthening links with the European electricity system is one of the country’s high priorities.
While there has been progress in liberalisation of Moldova’s power sector, due to lack of investment the power infrastructure remains in urgent need of rehabilitation and upgrade works.
The EBRD loan will be used to part-finance the design and rehabilitation of a number of substations, transformers and transmission lines, which will enable Moldelectrica to improve the efficiency and reliability of its transmission network.
Additionally, the project will benefit the existing interconnections with Romania and will help create the necessary infrastructure for future potential interconnection to the European network.
The project is expected to be co-financed by a US$ 20 million loan from the European Investment Bank and a €8 million grant provided by the EU Neighbourhood Investment Facility.
“We are delighted to sign this loan agreement today, which is one of the first investments following the signing of the Sustainable Energy Action Plan between the EBRD and Moldova in 2011. The EBRD financing will help Moldelectrica to increase security, stability and efficiency of its power transmission network and will enable the company to prepare for future integration into European network,” said Paul Henri Forestier, EBRD Director for Caucasus, Moldova and Belarus.
Since the beginning of its operations in Moldova the EBRD invested around €650 million in over 85 projects in various sectors of the country’s economy.