Electricity Distribution Upgrade



Project number:


Business sector:


Notice type:


Environmental category:


Approval date:

27 Nov 2009



PSD disclosed:

27 Aug 2022

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

The EBRD is considering a loan to be extended to RED Union Fenosa Moldova S.A. (UFM), the electricity distributor covering Chisinau as well as southern and central Moldova. UFM is 94 percent owned by Union Fenosa Internacional S.A. and 6 percent by the EBRD.  

Project Objectives

The EBRD loan will be used to upgrade UFM's network through investments in distribution lines as well as improvements in substations, installations, and information systems. 

Transition Impact

ETI score: 130

The transaction builds upon the existing loan the EBRD extended to UFM, solidifying and extending transition gains generated after the privatisation of electricity distribution network in 2000.  The loan will help to reduce losses as well as improve collection rates and operating performance.  Additionally, through the transaction the Bank also will continue its active dialogue with the energy regulator to foster a transparent, equitable tariff regime and attractive investment climate.

The transaction builds upon the existing loan the EBRD extended to UFM, solidifying and extending transition gains generated after the privatisation of electricity distribution network in 2000.  The loan will help to reduce losses as well as improve collection rates and operating performance.  Additionally, through the transaction the Bank also will continue its active dialogue with the energy regulator to foster a transparent, equitable tariff regime and attractive investment climate.


Client Information


RED Union Fenosa Moldova S.A., a subsidiary of Union Fenosa Internacional S.A.

EBRD Finance Summary

USD 15,000,000.00

The Bank is considering a USD 15 mln senior secured loan to UFM.  The IFC is expected to loan an equal amount on the same terms and conditions.

Total Project Cost

USD 40,000,000.00


The Bank's additionality is expected to stem from three main sources:

  1. The Borrower has not been able to obtain long-term debt financing for its capital investment programme without the Bank's involvement. Since the Bank's initial loan (OpID 13220), the Borrower had been financing investments with a combination of internally generated cash and short-term loans, a situation clearly suboptimal from a capital structure perspective. The Bank was able to provide financing where alternative sources were not available.
  2. The Bank's capability of policy dialogue with ANRE was something alternative lenders were not able to provide. Over the course of the initial loan (OpID 13220), the Bank played a critical mediating role between the Borrower and ANRE, particularly regarding tariff policy and the parameters assumed therein. The Bank is expected to be able to play a similar role for the proposed loan.
  3. The Bank, as it had done in the past, requires the Borrower to comply with stringent health and safety requirements to limit the electrocution fatalities associated with the Borrower's network.

Environmental and Social Summary

Environmental Classification and Rationale

Categorised B (2008).  Project impacts are likely to be site specific and can be readily identified and addressed through appropriate mitigation measures. Substantial project information is already available from the due diligence on the previous project and from subsequent monitoring and client reporting.

Due Diligence

Due diligence on this project is ongoing. This summary will be updated once it is complete. The environmental and social appraisal will review the performance of the client to date under the existing investments, and consider any additional impacts arising from this new project. Due diligence will include a review of the existing audit, results of EBRD monitoring, and the client's Annual Environmental Reports. EBRD  will undertake a site visit to assess the project's current performance, and will agree an updated ESAP with the client if required. Particular attention will be given to reviewing the client's environmental management systems and project appraisal procedures. Waste management, particularly the management of transformer oils, will be reviewed. As the network upgrade and new energy controls should lead to improved network efficiency, EBRD will also assess the potential reduction in Greenhouse Gas emissions.

Electrical safety has been issue in Moldova and the Bank has undertaken a TC programme aimed at reducing accidents and fatalities. This programme has had a positive impact, although further improvements may be necessary. This new project is an opportunity to review progress and promote best practice in terms of public awareness of the hazards and the safety of project installations.

Project stakeholders include the employees and customers of the clients, and any local people affected by the installation or upgrading of distribution lines and transformers. The client's existing information disclosure and stakeholder engagement efforts will be reviewed, including those associated with the electrical safety programme, and additional steps will be agreed if necessary.

Technical Cooperation and Grant Financing


Company Contact Information

Francisco Lopez
4, Andrei Doga Street Chisinau MD-2024

PSD last updated

27 Aug 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.


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