Moldova intends to borrow 6.5 million Special Drawing Rights (almost US$10m) from the International Development Association to support the agricultural producers. According to Deputy Minister of Finance Maria Caraus, the loan will be used to alleviate the consequences of last year’s drought and will be provided mainly to wheat and corn producers, IPN reports.

The loan is repayable in 20 years with a grace period of five years. The interest rate is 1.25% annually, plus a service charge of 0.75% and a commitment charge of 0.5%.

The Communist MPs voted against, saying the interest rate and charges are too high. They expressed their concern about the fact that Moldova has taken out too many loans and the debts accumulate at a time when the economy is stagnant. Eduard Musuc said the country’s foreign debts rose two times, but not much of the borrowed money was invested in the country’s economy.

Deputy Minister of Agriculture Viorel Gutu said the loan is vital for agriculture as it will support the institutional reforms in the agricultural sector. The persons who will receive money from this loan were identified by FAO experts.

The bill was passed in the first reading by a majority of votes.