ECO-BUS WEEKLY DIGEST 20-26 December. Most important Economy & Business news by IPN

● TUESDAY, December 21

Andrei Spînu: There are no preconditions for increasing passenger transport tariffs

Deputy Prime Minister Andrei Spînu, Minister of Infrastructure and Regional Development, said that he will have a meeting with carriers on March 23 to discuss solutions for improving passenger transport services and renewing the buses and minibuses. The official noted the Government will consider possibilities of supporting the carriers, including by a program called “Jalopy”, similar to that implemented in Romania, but the fares for passengers cannot be raise. Andrei Spînu said he accepts a dialogue with carriers so that the passengers benefit from safe and high-quality transport services. The carriers’ request to double the tariff is unjustified as the prices of gasoline and diesel fuel have declined in the recent past.

IMF Executive Board approves Moldova’s requests for arrangements under EFF and ECF

The Executive Board of the International Monetary Fund (IMF) approved Moldova’s requests for an economic reform program under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements. The approval of these requests enables the disbursement about US$84.4 million (SDR 57.2 million). Total envisaged disbursements under Moldova’s 40-month ECF/EFF arrangements would amount to about US$590.6 million (SDR 400.0 million), IPN reports, quoting a press release of the IMF. Following the Executive Board discussion, Kenji Okamura, Deputy Managing Director and Acting Chair, said the Moldovan authorities have made commendable progress in rehabilitating the banking sector and bolstering macro-financial stability. However, the COVID-19 pandemic, drought in 2020, and the ongoing surge in global energy prices, have slowed economic activity, intensified downside risks, and complicated policy making. The IMF-supported program aims to sustain the post-pandemic recovery, to address pressing developmental needs, and to strengthen Moldova’s governance and institutional frameworks.

EU disburses €60M to help Moldova cope with energy crisis

The European Union today delivered on its promise to offer €60 million to Moldova to help it cope with rising gas prices and strengthen Moldova’s green transition and energy security. The support was announced by European Commission President Ursula von der Leyen shortly after the outbreak of the energy crisis this autumn. “This support will help mitigate the socio-economic impact of the rising gas prices, in particular on vulnerable groups. In practice, it will help hundreds of thousands of Moldovan households through the winter by lowering their gas and heating bills. Beyond the immediate response to support citizens through the winter, the action will also support long-term socio-economic recovery and Moldova’s energy efficiency and security, in order to strengthen resilience to similar crises in future”, the European External Action Service said in a press release.

● WEDNESDAY, December 22

Minimum guaranteed salary in real sector proposed to be raised to 4,000 lei

Trade unions suggest that the minimum guaranteed salary in the real sector should be increased to 4,000 lei as of January 1, 2022. The employers do not agree with such a date, while the authorities said they will consider the possibility of raising this salary as from February. The subject was discussed in the meeting of the national commission for collective consultations and negotiations. Representatives of the National Confederation of Trade Unions said there are several levels of minimum salaries in Moldova: 1,000 lei; 2,935 lei (minimum guaranteed pay in real sector), and 3,840 lei (minim salary at public health facilities). There is also the guaranteed salary in the budgetary sector of 2,200 lei, but this will rise to 3,100 lei as from January 1. According to trade unionists, the minimum salary cannot be maintained at 1,000 lei when the minimum old age pension is of 2,000 lei. The Confederation suggests setting the minimum salary depending on the average monthly salary in the national economy. This method is stipulated in the European Social Charter that was ratified by Moldova in 2001.

IDEP: ECIPES Program is available at the click of a mouse and will support Moldovans

The ECIPES program that was conceived with European financial support and was presented in June 2019 is available at the click of a mouse and aims to support directly the young people in business, the mayor’s offices that launch development programs and the citizens who want to replace domestic appliances for new, more energy efficient ones, Iurie Calestru, programs director at the Institute for Development and Expertise of Projects (IDEP), stated in a news conference at IPN. Iurie Calestru said the program is intended for young people between the ages of 18 and 35 seeking to launch a business, who will get by €5,000 for a venture in the services sector or €15,000 for a manufacturing venture, €12,000 of which for buying equipment. The mayor’s offices that are twinned with EU municipalities will be able to implement a local development project with a maximum of €10,000 in EU funding. The project needs to have an ecological component.

Employers can ask for subsidies for days off offered for vaccination

Business entities can find, on the website raportare.gov.md, forms for applying for state subsidies for days off offered to salary earners who go to get a vaccine against COVID-19 and to employees who have children younger than 12 or children with disabilities, when online learning is applied, Minister of Labor and Social Protection Marcel Spatari stated in the December 22 meeting of the Cabinet. The business entities can file applications until December 25 for November. The subsidy of 150 lei a day for technical unemployment is provided to parents who take days away from work when the education process takes place online. In the case of days off for vaccination, the subsidy is of 450 lei a day.

Chisinau mayor warns of ‘major risks for economic security’

Chisinau Mayor Ion Ceban has called a meeting with the city’s manufacturers to warn them of potential cuts in water supply and sewer services, which could in turn spiral into “an emergency situation with major risks for our country’s economic security”. This comes after Apa-Canal, Chisinau’s water utility, was slapped with a 12 million lei fine for exceeding pollutant limits in the wastewater. On multiple occasions earlier, the utility blamed manufacturers for not treating their discharge adequately, if at all. “In my opinion, these risks and actions to be taken can be discussed in a coordinated manner so that solutions can be identified. I really hope this is not a case of the central government trying to prove something to the local authorities. I don’t want to think that someone would try to push Apa-Canal Chisinau into bankruptcy”, declared Ceban.

Government spends another 68 million lei on National Arena project

The government has decided to allocate over 67.7 million lei, the equivalent of 3.2 million euros, to increase the equity of the limited liability company “National Arena”. Public Property Agency director Eugeniu Cozonac recalled that the National Arena is public-private partnership (PPP) project started in August 2018 between the Ministry of Education and the private developer “Sam Investment Company”. “Under the contract, of the total number of 24 installments, two installments of 5 million euros each were paid during the construction period, and another 22 installments are to be paid within 11 years, starting with the date of issuance of the completion certificate which took place exactly two years ago. The money to be allocated under today’s decision represents the payment for the first and second installment related to the second year, in the amount of 3.169 million euros”, said Eugeniu Cozonac.

Government approves IMF loan, repayment procedure

The government approved the draft law on attracting two loans through the International Monetary Fund’s Extended Credit Facility (ECF) and the Extended Fund Facility (EFF). The total value of the program is 400 million special drawing rights (SDR), including SDR 314.3 million intended for budget support. Finance Minister Dumitru Budianschi noted that on December 20 the IMF Board approved the loan agreement with Moldova. The new program aims to support the economic recovery from the COVID-19 pandemic, improve the framework for preventing and combating corruption, and strengthen governance in the financial sector and the public sector. The loan offered via the ECF, amounting to SDR 104.75 million, will be repaid in ten equal installments, after the expiry of 5½ years from each draw. The maturity is 10 years, and the interest will be set every two years and will be zero percent until 2023.

National Fund for Regional and Local Development to be established

The government approved a draft law establishing a National Fund for Regional and Local Development. Its budget for 2022 will be 800 million lei. The money will be allocated in particular for town halls, for regional and local development projects. Minister of Infrastructure and Regional Development Andrei Spinu said that approximately 300 million lei will be set apart for regional projects, specifically for job creation and human development in the development regions, especially in the district centers, but also for the improvement of municipal infrastructure, such as water supply and sewer systems. Another 500 million lei will be devoted to local projects, specifically to improve infrastructure and renovate social establishments at community level, including schools, kindergartens, playgrounds etc.

● THURSDAY, December 23

Broad governance and structural weaknesses continue to impede improvement in living standard, IMF

Broad governance and structural weaknesses continue to impede sustained improvement in the living standard of Moldovan citizens. Rule of law and anti-corruption frameworks remain weak. Public spending is inefficient and poorly targeted, with low-quality and inaccessible infrastructure. High emigration, particularly among the better-educated Moldovans, continues to hold back human capital accumulation. A weak business environment constrains private investment and productivity, says a press release issued after the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with the Republic of Moldova.

Dniester Hydropower Complex, ecosystem costs of tens of millions of dollars

Put into operation 30 years ago, the Dniester Hydropower Complex situated on the territory of Ukraine was brought into focus only during the last decade. Several years ago, the Ukrainian authorities reconfirmed the plans to extend the hydropower system by building a new power plant. This would cause considerable damage to the Nistru River and the population that is somehow connected to it. It concerns most of the inhabitants of the Republic of Moldova and Odessa Oblast of Ukraine for which the water from the river is the main source of drinking water and water for household use, shows a study commissioned by UNDP Moldova that is quoted by IPN. Even if the forecasts concerning the impact of the extension of the Novodnestrovsc power plant were different, from moderate to apocalyptical, there is no exact assessment of the possible damage that will be caused if the system is extended. However, by different methodologies, the extent of the damage done to the river and the population can be gauged.

● FRIDAY, December 24

Daniel Ioniță: Moldova is a top priority for Romania

The Republic of Moldova is a top priority for Romania, said Romania’s Ambassador in Chisinau Daniel Ioniță. He expressed his satisfaction with the fact that the pro-European forces hold absolute power in the Republic of Moldova and this enabled to intensify the relations between the two states. The official noted Romania will further support Moldova’s European course without any reservation. Ambassador Daniel Ioniță said that after the Party of Action and Solidarity took over, the partnerships between Romania and the Republic of Moldova intensified and this is confirmed by the roadmap for Moldovan-Romanian cooperation that was signed by foreign affairs ministers Bogdan Aurescu and Nicu Popescu. In accordance with this document, energy and road infrastructure projects will be launched, while the €100 million non-reimbursable assistance agreement signed in 2010 by the Governments of the two states will be extended.

Heat charge in Chisinau diminished by 83 lei

As of January 1, the consumers served by Termoelectrica will pay 1,689 lei per gigacalorie of heat, down 83 lei from the current charge of 1,772 lei/Gcal. However, the National Agency for Energy Regulation increased the charge for the consumers served by the thermoelectric plant CET-Nord by 92 de lei/Gcal, from 1,742 lei/Gcal to 1,834 lei lei/Gcal as from January 1. In the same meeting, the Agency approved a 2.1% reduction in the average annual price for the electricity produced by Termoelectrica as of January 1 to 2.33 lei/kWh without VAT. The charge for the electricity produced by CET-Nord was set at 2.08 lei/kWh without VAT, as opposed to 2.84 lei/kWh at present.

NAER director comments on Tiraspol’s intention to sign direct contract with Gazprom

For the Transnistrian region to be able to have a direct contract for the supply of gas with Russia’s gas giant Gazprom, a number of licenses for the transportation of natural gas are needed. It is not so easy to obtain national and international licenses, director of the National Agency for Energy Regulation (NAER) Octavian Calmîc stated when asked to comment on Tiraspol’s intention to establish a direct contractual relationship with Gazprom. “The consumers from the right bank or those from the Republic of Moldova will not be directly affected. However, for something like this the Transnistrians need a series of licenses in the field because only licensed companies can transport natural gas or electrical energy. The process is not so simple,” Octavian Calmîc stated in a news conference.

District heating in Balti modernized with EBRD support

Citizens of Balti, Moldova’s second-largest city, will benefit from more efficient district heating thanks to a new €15 million loan from the European Bank for Reconstruction and Development (EBRD) to state-owned company CET Nord JSC, IPN reports, quoting a press release of the Bank. The EBRD will provide a €14 million loan, alongside Green Climate Fund (GCF) financing of €1 million. The loan will be complemented by a €2 million grant from the Eastern Europe Energy Efficiency and Environment Partnership (E5P) fund. Octavian Costas, EBRD Associate Director, Senior Banker, and Andrei Spinu, Deputy Prime Minister and Minister of Infrastructure and Regional Development of Moldova, signed the agreement in the capital, Chisinau, today.