ECO-BUS WEEKLY DIGEST September 20- 26. Most important Economy & Business news by IPN
● MONDAY, September 20
Moldova to borrow money from EBRD and EIB for energy efficiency project
The Republic of Moldova will raise a sovereign loan of up to €30 million from the European Bank for Reconstruction and Development for an energy efficiency project. The EBRD loan will be co-financed by a €30 million loan from the European Investment Bank and an investment grant of €15 million from the EU’s Neighborhood Investment Platform, IPN reports, quoting a draft Government decision on the initiation of negotiations on the lending agreements that was proposed for public consultations. The project will finance energy efficiency measures, focusing on improvements to the building envelope, heating systems, ventilation and air-conditioning systems, lightings, and introduction of renewable energy sources. The project aims to improve energy efficiency at the building level prioritizing public buildings, both municipal and state-owned, across the country, which will result in significant environmental benefits through energy savings and reduction of carbon emissions. The project will be implemented by the Ministry of Economy and Infrastructure of Moldova, which assigned the Moldovan Energy Efficiency Agency as the project promoter. The total cost of capital expenditure is €75 million. The project will be implemented during four years (2022 – 2025).
● TUESDAY, September 21
Minister of economy about restrictions for hospitality industry: We must avoid a lockdown
The introduction of restrictive measures is necessary for avoiding a lockdown in the Republic of Moldova, said Minister of Economy Sergiu Gaibu. He noted a final decision as to the obligation to present a COVID-19 vaccine certificate or a negative test result for the visitors of entities of the hospitality industry hasn’t been yet taken, but this will depend on the pandemic developments. According to Gaibu, the experience of other states shows that the introduction of restrictive measure for the hospitality industry facilitates the fight against the pandemic. However, the decision concerning the obligation to present a vaccine certificate when entering restaurants will be taken only if the number of COVID-19 cases increasers dramatically.
Post of director general of Moldova’s Post Office vacated
Vitalie Zaharia quit as the director general of the state-run enterprise Moldova’s Post Office. Zaharia noted that his tenure of almost two years was difficult, being marked by the crisis caused by the COVID-19 pandemic, IPN reports, quoting a message published by the enterprise. “This thing influenced the quality of the implementation of the development plan and planned optimization and rationalization measures. All the set objectives needed a continuous adjustment and adaptation to the conditions of the emergency situation by performing special organizational activities. This was one of the biggest challenges,” stated Vitalie Zaharia.
Slight decline in gasoline prices is anticipated, NAER director
The application of the new method of setting fuel prices created the incorrect perception that the new law generated a rise in oil prices. The analysis of Platts quotations for gasoline and diesel fuel shows that the highest fuel prices in the last five years on the international market were recorded in September 2021, said representatives of the National Agency for Energy Regulation. According to them, the Republic of Moldova cannot detach itself from the developments on the international market. “Experts and politicians representing different parties say that this law generated price rises. But this is not true. This law didn’t generate price rises. It generated a reduction in prices, against the prices that could have been witnessed if the law hadn’t taken effect in its current form,” NAER director Eugen Carpov told a news conference.
Former company president: Swindlers from prosecution service and judges destroy our businesses
Oleg Caminschi, founder and ex-president of the building company “Сovconsgrup”, said that he was convicted and was illegally dispossessed of his property to the value of 140 million lei. “The swindlers from the prosecution service and judges continue to destroy our businesses and life,” he stated in a news conference at IPN. Oleg Caminschi, who is a building engineer by specialty, said that in 2003 he founded a building company. Until 2014, he had enough properties and capacities to fulfill building tasks. The company was managed by 11 persons and about 200 persons worked on the building site. Oleg Caminschi related that he had an investor, “Valan International Cargo”, in a project to erect a building that was 300 square meters in area. “When the building was to be put into commission, the City Hall didn’t sign the contract to make the building available for occupancy, saying that a water pipe to unite Centru and Botanica needs to be set up front of the building. Therefore, the period for making the building available was extended for six months. As a result, the investor applied a delay fine of over €23,000. Given that the sum was significant, he went to court and won the case, with a sum of €2,000 remaining overdue.
Call to newcomers to judicial system to examine “swindlers from prosecutions service and judges”
Oleg Caminschi, founder and ex-president of the building company “Сovconsgrup”, called on the newcomers to the judicial system to examine the “swindlers from the prosecutions service and judges who fabricate cases and lie”. In a news conference at IPN, Oleg Caminschi said that in the spring of 2010, a person from the Chisinau City Hall approached him and told him that the then acting President Mihail Ghimpu asked him to build and sell areas to a person named Gore. He initially refused as he needed those areas for developing the own company, but he was pressed to accept. A contract with Gore was signed on March 30, 2010. “Сovconsgrup” pledged to erect 100 square meters in area, while Gore was to pay €135,000. On May 7, 2010, practically in a month, Gore was transferred those areas, but he paid only €113,000. In a period, Oleg Caminschi was accused of swindle.
Arguments for and against banning of lotteries and sports bets
The games of chance are a danger to the people who are dependent on them. That’s why their advertising should be regulated, considers the author of the bill to extend the ban on advertising for all categories of games of chance that was registered in Parliament. On the other hand, business entities operating in the field consider the provisions of the law proposed for public debates imply risks and this type of business cannot exist without publicity. PAS MP Dumitru Alaiba, bill author, said the goal of the initiative is to protect the people from an addition. The bill does not ban gaming or lotteries. It regulates advertising of games of change. Moldova is one of the most liberal states in terms of advertising of games of chance and optimal solutions for everyone should be identified here. The bill bans adverts for games of chance, bets and lotteries in any form. In the current situation, the state’s revenues are secondary to the health of people.
● WEDNESDAY, September 22
Slusari about contract for purchase of gas: Gazprom discusses with Gazprom
The Government should take part in the negotiation of a new contract for the supply of Russian gas and should try and obtain a reduction for the Republic of Moldova, said ex-deputy Speaker of Parliament Alexandru Slusari. He leveled criticism at the authorities’ decision to make the negotiations with Gazprom the full responsibility of MoldovaGaz. The former director of the National Agency for Energy Regulation Victor Parlicov believes Moldova will continue to pay a preferential price amid the global rises in gas prices. Alexandru Slusari said given that the Russian gas giant Gazprom owns 50% of the shares in MoldovaGaz, representatives of the Government are obliged to take part in the negotiation of a contract for the purchase of gas and to defend the interests of the citizens of the Republic of Moldova.
Leu in August appreciated by 1.6% in average values against U.S. dollar
The Moldovan leu in August appreciated by 1.6% in real values against the U.S. dollar to 17.7357 USD/MDL, from 18.0233 USD/MDL in July, IPN reports, with reference to the National Bank of Moldova. The degree of covering the net demand for currency from business entities by the net supply of currency from private individuals in August was 79.8%, as opposed to 97.9% in July. The net supply of currency from private individuals decreased by US$16.3 million (-6.6%), while the net demand for currency from business entities grew by US$37 million (+14.7%) on a month before. In August, the Bank intervened on the local interbank market and bought and sold currency, depending on the conditions on the market. In general, it sold currency totaling US$ 8.2 million.
Guaranteed minimum monthly income at 1,196 lei as from October 1
Starting with October 1, the guaranteed minimum monthly income will be 1,196 lei. A decision to this effect was approved by the Cabinet in its September 22 meeting. Minister of Labor and Social Protection Marcel Spatari said the minimum guaranteed monthly income is used to determine the social welfare. On October 1, this will be indexed by 1.0386 given that the inflation rate in the first half of this year was 3.86%. Respectively, after indexation, the minimum guaranteed monthly income will be 1,196 lei. In the first half of this year, about 53,000 families benefited from social welfare. The average size of the benefit was 1,096 lei. The Ministry of Labor and Social Protection will formulate proposals to amend the state budget law for 2021 so as to cover the costs associated with the implementation of this decision.
Cabinet approves use of Special Drawing Rights allocated by IMF
The Cabinet on September 22 approved a draft decision concerning the use of the Special Drawing Rights allocated by the International Monetary Fund. The 165 million Special Drawing Rights (equal to US$236m) allocated by the IMF to the Republic of Moldova through the National Bank of Moldova will be used to finance the state budget needs. The sum is equal to about US$236 million. The interest rate on SDRs is floating and on September 20 was 0.05%. The annual commission is also floating and now represents one thousands of a percent. Minister of Finance Dumitru Budianschi said the financial resources will be used to finance the budget deficit. The draft decision is to be examined by Parliament.
State securities will be sold directly to private individuals through online platform
The state securities will be sold directly to private individuals in the Republic of Moldova through the agency of an electronic platform (e-VMS) in which the securities will be issued directly to individuals without tender contests and without intermediation. Currently, the private individuals can purchase state securities only through primary dealers. The Cabinet on September 22 approved the concept of the program to sell state securities directly. The draft says that in general, the investors can purchase state securities by two main channels: primary market and secondary market. Nevertheless, the private individuals (wholesale or retailing investors) often do not have access to state securities as the institutional investors do because they have small sums for investment.
● THURSDAY, September 23
Ukraine unexpectedly becomes a competitor for Moldova on European plum market
Ukraine has unexpectedly become a competitor for Moldova on the European plum market and one of the surprises of the fresh plum season in 2021 is the record low price on the Ukrainian market, IPN reports, quoting EastFfruit - an information and analytics platform for the growth of the horticulture business. However, another surprise was that Ukraine starts to put pressure on Moldova in foreign markets, despite the almost complete lack of experience in exporting plums. First of all, quality parameters and stable supplies of plums are important for fruit importers from the European Union, but in 2021 Ukraine is doing well with the quality of plums and even the volumes offered by growers are quite large.
IMF mission to start discussions with Moldovan authorities Sept. 27
The International Monetary Fund (IMF) mission led by Mr. Ruben Atoyan will start discussions with the authorities of the Republic of Moldova on September 27, 2021. Rodgers Chawani, IMF Resident Representative in the Republic of Moldova, said the mission will hold combined discussions with the authorities on the 2021 Article IV consultation and their request for a new program focused on a set of policies to lay the foundation for the post-pandemic recovery and advance governance and institutional reforms. Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
Parliament votes to reduce VA rate for hospitality industry as from October 1
A VAT rate of 6% will be used in the hospitality industry as from October 1 this year, down from 12% at present. The new rate will be applied to accommodation services and food products or drinks, except for alcoholic beverages. The bill that introduces the reduced VAT rate for the period of the state of emergency or public health emergency was adopted by 84 votes in favor after being given two readings. PAS MP Dumitru Alaiba said the acceleration of the introduction of tax concessions for the hospitality industry is important as the companies sustain considerable losses owing to the restrictions imposed in connection with the COVID-19 pandemic.
Private operators will have access only to freight or passenger rail transport
The MPs gave a first reading to the Code of Railway Transport on September 23. Under the draft Code, railroad infrastructure will continue to belong to the state, while the hauling, passenger and freight transportation service can be provided by private operators. The bill authors said the implementation of the new Code will eliminate the monopoly held by the state-run enterprise Moldova’s Railways on the rail services market. “I repeat, in particular for the citizens - the state will continue to be the only owner of railroad infrastructure. Private operators will have access only to freight or passenger rail transport if there is demand. Clear rules will be set down as to the state’s contribution to the development of railroad infrastructure,” Deputy Prime Minister Andrei Spînu, Minister of Infrastructure and Regional Development, said in Parliament.
Average interest rate on bank loans in lei and foreign currency decreased in August, NBM
The average rate on new deposits attracted in national currency in August was 3.13%, while on those attracted in foreign currency was 0.44%. “Compared with a month before, the average rate on new term deposits attracted in national currency decreased by 0.02 percentage points,” the National Bank of Moldova (NBM) noted in a press release that is quoted by IPN. The legal entities made deposits at an average rate of 2.18%, the pirate individuals – of 3.53%, while the individuals practicing an activity – of 3.50%. The new term deposits in foreign currency decreased by 0.05 percentage points. The deposits in national currency with a term of two to five years, which account for the largest part, were attracted at an average interest rate of 3.81%. The deposits of legal entities were attracted at an average rate of 3.17%, while of private individuals – of 3.98%.
● SATURDAY, September 25
Chisinau-Bucharest train back on route
At the start of November, the Chisinau-Bucharest train will start to run again after a pause of 20 months. The route was suspended in March 2020 owing to the COVID-19 pandemic. Moldova’s Railways director Oleg Tofilat has told IPN that two routes a week, on Tuesday and Friday, will be operated initially. Later, depending on the number of passengers, the number of routes can be supplemented. A trip by the Chisinau-Bucharest train lasts for about 13 hours. Oleg Tofilat said the resumption of the Chisinau-Bucharest train route depends on a number of aspects. “CFR (Romanian Railway Company, e.n.) should confirm the availability of the rail network. We have yet to repair the railcars on time. Some of the parts are likely to come later,” said the director. He added that they plan to restore the routes to Iasi and Odessa with modernized trains also at the beginning of November.
Cotiujenii Mari, Rogojeni and Cobâlea to be turned into tourist attractions
The villages Cotiujenii Mari, Rogojeni and Cobâlea in Șoldănești district will become tourist attractions. The mayor’s offices of the three villages, in partnership with business entities and associations of natives, have won US$60,000 in grant funding from the Swiss Government for developing tourist infrastructure. In a post on Facebook, UNDP Moldova, which supports the initiative as part of the Migration and Local Development Project, said that a rock stage will be built near the famous cellars in Rogojeni, which will become a place for recreation and cultural activities. In Cotiujenii Mari, there will be launched the brand “Răzășesc Drink” given that they make the so-called Răzășesc plum brandy there. Tourists will be able to taste “Răzășesc honey” made by beekeepers who will study at a beekeeping school.
