In its largest investment in Moldova to date, the European Bank for Reconstruction and Development (EBRD) is extending a €150 million loan facility to the Moldovan government for the rehabilitation of up to 200 km of the country’s major motorways.
The EBRD financing will allow Moldova to upgrade its road network, make urgently needed repairs and ensure that the key road links are maintained so that they facilitate economic growth and regional integration.
Moldova’s Prime Minister Iurie Leancă said: “A well-functioning transport system is critical for economic growth and improving Moldova’s road infrastructure is one of my government’s key priorities. We expect around 1,000 jobs to be created by this investment and it will reduce business costs and increase productivity, creating economic growth and prosperity for all.”
The EBRD’s Director for Transport, Sue Barrett, added: “High quality infrastructure is crucial for people’s daily lives and the wider economy and the EBRD is ready to help. This new loan – the Bank’s largest investment in Moldova to date – is a sign of our strong commitment to supporting the country’s infrastructure that will drive growth in Moldova and beyond.”
The EBRD loan will be used to rehabilitate a number of major motorways: a section of the R33 Hîncești-Lăpușna-M1 road to the Romanian border; the R14 Bălți-Sărățeni road section – part of the transport link between the capital Chișinău and Moldova’s second largest city Bălți; the R9 Soroca-Arionești road in the north; and the R34 Hîncești-Leova-Cantemir road in the south. The loan will also help build the 17 km-long M3 Slobozia Mare bypass on the M3 Chișinău-Giurgiulești road that connects the capital to the only port in landlocked Moldova.
Julia Otto, Head of the EBRD Resident Office in Chișinău, said: “Located at a geographical crossroads and since 2007 also bordering the European Union, Moldova’s roads are becoming increasingly important for the economic development of the country and the wider region. Better roads will help spread economic development to remote regions, will bring producers closer to their markets and will take people to their destinations more safely, improving their quality of life.”
The EBRD loan is split into three tranches of €63 million, €40 million and €47 million, respectively. The commitment of the second and third tranches, in 2014 and 2015, will be at the Bank’s sole discretion and subject to the government’s successful implementation of the project and its reform agenda in the road sector. To help the government implement these reforms the Bank is providing grant funding of up to €500,000 from EBRD Shareholder Special Fund.
The EBRD financing is complemented with an equivalent loan from the European Investment Bank and a grant of up to €15 million has been requested from the EU’s Neighbourhood Investment Facility to finance rehabilitation of additional road sections.
Infrastructure modernisation and rehabilitation are among the EBRD’s priorities in Moldova. The EBRD has invested €213 million in the country’s infrastructure, including road rehabilitation, the development of Chișinău International Airport and the expansion of the privately operated Giurgiulești port.
The EBRD, one of the largest investors in Moldova, has signed 100 investment projects in the country, covering energy, transport, agribusiness, general industry and banking sectors, for a cumulative amount of €897 million.