EBRD and IFC finance modernization of power distribution sector in Moldova

The European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) are supporting the modernization of the power sector in Moldova with two equal loans to RED Union Fenosa Moldova S.A worth a total of $30 million to finance the upgrade of its distribution network with a particular emphasis on boosting energy efficiency, Info-Prim Neo reports, quoting a communique from the World Bank Office in Moldova. Majority-owned by the Spanish Gas Natural Group, RED Union Fenosa Moldova is the main electricity distributor in Moldova, covering the central and southern region of Moldova, including the capital Chisinau. The proceeds of the loans will support Union Fenosa Moldova’s investments in upgrading and modernizing its electricity network lines and substations, which will enable the company to increase efficiency, cut power losses and improve the safety and security of the network. With a total cost of $40 million, the project will be co-financed by IFC, EBRD as well as by the company’s own funds. “The EBRD is pleased to support Union Fenosa Moldova’s further investments in modernizing the electricity distribution network in Moldova. This project will help the company improve efficiency and reduce power distribution losses. We hope that the Bank’s investment will help improve the investment climate in the country, stimulating further private sector involvement”, said Nandita Parshad, Director of the EBRD’s Power and Energy team. Ana Maria Mihaescu, IFC Chief of Mission in Romania and Moldova said: “IFC is pleased to support its existing relationships under difficult market conditions and to contribute to the development and sustainability of Moldova's power sector.” The EBRD investment is provided under its Mid-Sized Corporate Support Facility, established in order to support the Bank’s existing corporate clients in the current difficult environment. The EBRD holds a minority stake in RED Union Fenosa Moldova. EBRD and IFC have previously supported the company with loans worth $50 million when the company was privatized.