ECO-BUS WEEKLY DIGEST October 25-31. Most important Economy & Business news by IPN
● MONDAY, October 25
Andrei Spînu: Discussions on gas supplies will continue in St. Petersburg on Oct. 27
The discussions on the supply of gas by Gazprom to the Republic of Moldova are thorny and no favorable result for Moldova has been achieved so far. The discussions will continue with Gazprom CEO Alexei Miller in St. Petersburg on October 27 and will involve Deputy Prime Minister Andrei Spînu, Minister of Infrastructure and Regional Development. According to Andrei Spînu, the discussions on the commercial gas for the debt accumulated since 1994 will be continued in St Petersburg. Moldova’s position will remain unchanged – that an independent audit of the gas debt is needed before signing any kind of agreement. They will also discuss the price of gas. They want a fair price based on a formula similar to that used in the case of other states with which Gazprom signed long-term contracts. Moldova proposed the stock exchange price for annual contracts or a mixt formula that will take into account both the stock exchange price and oil quotations.
Moldova to receive gas from Ukraine, media reports
After last Friday Oleksiy Danilov, Ukraine’s National Security Council head, announced Ukraine would supply gas to Moldova, today he had to clarify it was going to be a loan, Ekonomichna Pravda reported. Friday’s announcement had “a bombshell effect” in Kyiv. Given the situation on the global markets and the Ukrainian government’s effort regarding possible price constraints for domestic consumers, the announcement raised a few eyebrows among Ukrainians. Moreover, in the absence of further official information, a few publications indulged in conspiracy theories about “1 billion cubic meters of gas” in exchange for Moldovan authorities stiffing the investigation into the kidnapping of Mykola Chaus, a Ukrainian judge accused of corruption who had sought political asylum in Moldova before being mysteriously brought back to Ukraine.
Putin has ‘no plans’ to meet Moldovan leadership to discuss gas, spokesperson
Russian President Vladimir Putin has no contacts with the Moldovan leadership on the issue planned so far, Kremlin spokesperson Dmitry Peskov was quoted by TASS as saying. However, according to Peskov, Moscow expects the dialogue with Chisinau on the gas issue to continue. He added that Russia’s position on the subject is utterly clear. “The dialogue should continue somehow. All positions are clear, with the position of the Russian side, Gazprom being utterly clear, utterly simple. This is a commercial position, which includes certain discounts. That is why we hope, of course, that the conversation will continue one way or another”, he said.
● TUESDAY, October 26
Moldova makes first purchase of gas from alternative sources in its history
The state-owned enterprise Energocom and the Polish company PGNiG on October 25 signed a contract for a trial purchase of 1 million cubic meters of natural gas, IPN reports, quoting the Government’s press service. The purchase price of gas is not specified, but the Government assures that the tariff paid by the citizens for natural gas will remain unchanged. In the announced tender contest, Energocom received seven bids. The trial purchase is aimed at testing the capacity to import gas from alternative sources and at balancing pressure in the natural gas transportation system. The Government said the negotiations with the Russian Federation and Gazprom on the signing of a long-term contract for the supply of gas continue. As the pressure in the national natural gas pipeline network is low, the purchase from alternative sources is made to maintain the transmission of natural gas to consumers. This is the first purchase of natural gas from alternative sources in the history of the Republic of Moldova.
Ion Munteanu: There is a risk supply of electricity will be halted. Vladimir Bolea: Gas should be paid
If the Moldovan authorities procure natural gas from alternative sources only for the right side of the Nistru, the supply of electrical energy can be halted, warn energy experts. According to them, even if the Republic of Moldova purchases electricity only from Ukraine, Tiraspol can boycott the process. For their part, representatives of the government said all the citizens, both those from the right side of the Nistru and those from the left side, should pay for each cubic meter of gas. Energy experts said the absence of a new contract with Gazprom is dangerous for the Republic of Moldova as the provision of the country with electrical energy is also jeopardized given that the Kuchurgan Power Station that now works at reduced capacity on coal and can seize operations.
E-notice attesting impediment justifying nonfulfillment of obligation
A new digital service enables to obtain a E-notice attesting the impediment justifying the nonfulfillment of an obligation (force majeure). This way, entrepreneurs will submit an application online by filling out a form and attaching the documents needed for obtaining the certificate. The platform on which this service is available also enables to obtain an electronic document with the digital signature of the issuing authority. The Chamber of Commerce and Industry of the Republic of Moldova, in partnership with the USAID-funded Moldova Structural Reform Program, presented today the procedure for using the notice, explaining all the stages for submitting an online application through www.client.chamber.md. Natalia Calenic, deputy head of the Chamber of Commerce and Industry, said the service that is known as a force majeure certificate is developed at international level by the International Chamber of Commerce. This institution provided the model force majeure clause and all the entrepreneurs for all over the world include in it commercial contracts. The possibility of obtaining the certificate online enables to save time and money. These notices are asked and issued on paper only at the Chamber’s offices in Chisinau. The service can be accessed from a computer or a cellphone by using different types of digital signatures. It is also integrated into the Mpay system that enables to pay for the service online.
EU will help Moldova with circular economy
The small and medium-sized enterprises operating in water management, waste and renewable energy in Moldova will cooperate with similar EU companies within the P2GreenEST project that is part of the European Green Deal. The launch of the project that aims to facilitate the innovatory European companies’ access to public procurement in the EaP countries was held under the aegis of the Chamber of Commerce and Industry of the Republic of Moldova. One third of the 1.8 trillion euro investments from the NextGenerationEU Recovery Plan, and the EU’s seven-year budget will finance the European Green Deal. As part of P2GreenEST, clusters and SMEs from the EU and Moldova and from other EaP states will establish partnerships by consultancy and joint participation in public tender contests staged in Eastern European states.
CC founds contested Customs Code article on information disclosure to be constitutional
The Constitutional Court has recognized Article 17 (1), (2) and (3) of the Customs Code to be constitutional, in so far as the customs body and the court may verify, when examining cases concerning access to information, the existence of a legitimate ground to restrict access to information used for customs purposes and may balance competing principles. The ruling comes after the article was challenged by lawyer Vitalie Zama. Constitutional Court president Domnica Manole told a press briefing that the lawyer challenged the provisions according to which the Customs Service provides only general information, while not releasing more specific information to those who request it, with limited exceptions. The Court held that the Customs Service has a duty not to disclose information related to the personal life, professional or commercial activities of individuals or legal persons. The Customs Service also has an obligation to prevent the commission of customs offenses and the task of conducting criminal investigations into offenses within its subject matter jurisdiction. Such material is classified.
Vitol wins tender to deliver gas to Moldova
The Dutch company Vitol, one of the world’s top three carriers of petroleum products, won the tender launched by the state-owned company Energocom. According to the contract, over the course of tomorrow, November 27, the company will deliver one million cubic meters of natural gas to Moldova, announces a press release of the Public Property Agency. No other details are provided. Earlier today, Energocom signed a contract with the Polish company PGNiG for a trial purchase of one million cubic meters of natural gas. The price to be paid is not specified for this transaction either, but the authorities assure the rates paid by domestic consumers remain unchanged. At the announced tender, Energocom received seven bids. The trial purchase is intended to test the ability to import gas from alternative sources and aims to compensate for the low pressure in the natural gas supply system.
● WEDNESDAY, October 27
Energy crisis harms President Maia Sandu’s popularity, opinion
Economic expert Viorel Gârbu said the negotiations between Chisinau and Moscow on the signing of a new contract for the supply of gas are ‘awkward’. By making purchases at exorbitant prices in the recent past, Moldova transmits to Gazprom the message that it can afford to pay the market price of natural gas. For his part, lawyer Ion Dron said President Maia Sandu should become involved in the talks with Russia. Jurist Ion Dron said the authorities’ rhetoric concerning the “commercial relationship” between Moldovagaz and Gazprom is harmful to Moldova as the political factor has always dominated in the talks with Moscow. President Maia Sandu tries to dissociate herself with the energy crisis faced by the Republic of Moldova. “From political viewpoint, Maia Sandu has a problem that dominates her permanently. It goes to the rating. She is concerned about her political future. She didn’t become involved because this situation spoils her image. She will play the fanfare when a contract is signed officially. For now, any public appearance on the issue affects her rating. But the true leader is the one who manages a crisis situation,” Ion Dron stated in the program “The Fourth Estate” on N4 TV channel.
Procurement of small amounts of natural gas is not a solution, opinions
The borrowing from Romania of the volumes of gas needed for November and their transportation through the Iasi-Chisinau gas pipeline would strengthen Moldova’s position in the talks with Gazprom, said former Deputy Spoeaker of Parliament Alexandru Slusari. According to him, the purchase of natural gas in small amounts from the international market is not a viable solution for the Republic of Moldova. For his part, political commentator Ion Tăbârță said that Moldova needs a contract for the purchase of gas for at least a year to ensure its energy security. After the state-owned company Energocom and the Polish company PGNiG signed a contract for the purchase of 1 million cubic meters of gas, a new contract for the supply of a similar amount was signed with the Dutch company Vitol. According to the authorities, the gas purchased from alternative sources is needed for ensuring pressure in the network, which declined by 30%.
HiSky launches direct Chisinau-Milan flight
HiSky has launched the direct flight to Italy’s Milan from the Chisinau International Airport. The direct Chisinau-Milan flight will be available two times a week as from December 24. The operator said HiSky’s aircraft will take off from Chisinau to Milan each Monday, at 8am, and each Friday, at 5pm, local time. The flight will last for about two hours. The takeoff from Milan to Chisinau will be at 10:25am local time on Monday and at 7:25pm on Friday. “We receive a lot of messages from passengers, who ask for flights to Italy. The unpredictability caused by the pandemic and the permanent restrictions made us hesitant, but the developments have positive dynamics and we think time has come to announce this flight. We consider it will be an attractive flight for the diaspora from the region and for those who like city breaks in the famous fashion capital,” HiSky director general Iulian Scorpan said, being quoted in a press release.
BBC Ukraine about gas supply crisis in Moldova
The gas supply crisis in Moldova repeats the past problems of Ukraine: the contract with Gazprom expired and a new agreement is impossible, BBC Ukraine notes in an article about the threatened supplies of Russian gas in Moldova. BBC’s correspondent in Chisinau Steve Rosenberg reminds that Russian threatens to leave Moldova without gas if it does not sign a new contract until December 1. Negotiations continue. Moldovan officials say they would like to sign a new contract with Gazprom, but only if the terms are favorable. “For Moldova, though, reducing Russia’s influence won’t be easy. In energy terms, Moldova is closely tied to Moscow. Not only has the country been 100% dependent on Russian gas. But its own gas company, Moldovagaz, is majority-owned by Gazprom. And more than 80% of Moldova's electricity comes from a Russian-owned power plant in Trans-Dniester - a separatist region of Moldova, backed economically, politically and militarily by Moscow,” runs the article.
Interim director appointed at National Vine and Wine Agency
Elizaveta Breahnă will serve as interim director of the National Office of Vine and Wine ONVV until a general director is appointed by standard procedure. Elizaveta Breahnă was introduced to the ONVV staff by Sergiu Gherciu, state secretary of the Ministry of Agriculture and Food Industry. “For the wine-making community you have become a remarkable figure with an impeccable reputation. I wish you productive cooperation with the ONVV team so that you can grow the Office together. Also, we rely on the involvement of each employee to develop the wine sector in a coordinated and sustainable manner”, Gherciu was quoted in a press release as saying. For her part, Elizaveta Breahnă said she will do her best to create the necessary conditions for the sector to grow. “I hope to further have the support of the Ministry of Agriculture and Food Industry to see new achievements both nationally and internationally. We aim to increase sales and become more competitive so that Moldovan wines become a symbol of quality despite all the weather and crises”, stated the interim director.
Moldtelecom signs exclusive contract with Deutsche Telekom Global Carrier
Moldtelecom has signed an exclusive contract with Deutsche Telekom Global Carrier (TGC) for the provision of international wholesale voice termination services beginning on November 1. The Public Property Agency (APP) said in a press release the deal was reached following an extended tender process. APP director Eugeniu Cozonac said the agreement will benefit both corporate and individual customers of Moldtelecom. “Thanks to this long-term partnership, Moldtelecom will benefit from advantageous commercial conditions for terminating the traffic generated by its subscribers to all international destinations. I am sure this will improve the quality of telephone services. In addition, Moldova’s interconnection with the rest of the world is absolutely important at the corporate level as well”, said Eugeniu Cozonac.
European Commission offers Moldova €60M to manage energy crisis
The European Commission is making available €60 million to help Moldova deal with the energy crisis, Commission President Ursula von der Leyen has twitted after meeting with Moldovan PM Natalia Gavrilița. No further details or terms have been disclosed so far. President Maia Sandu thanked the European Commission and Ursula von der Leyen personally for their commitment in supporting Moldova through the energy crisis.
● THURSDAY, October 28
DXT and PGNiG to ship natural gas to Moldova today
The tender contest announced on the third day by the central electrical energy supplier Energocom was won by two bidders – the international trading house DXT Commodities, which is a leading player in the wholesale natural gas and power market, and the Polish company PGNiG. The two will supply natural gas to Moldova on October 28. The Public Property Agency said the volume of gas purchased on October 25 from PGNiG and on October 26 from the Dutch company Vitol was shipped to Moldova in accordance with the terms of the contract. The Moldovan authorities avoid specifying the price paid by the Republic of Moldova for the gas bought from alternative sources, invoking the trade secret.
ODIMM launches campaign to inform about and promote social entrepreneurship
The Republic of Moldova feels the pressing need to solve environmental and community problems, problems related to the social and economic inclusion of persons with disabilities. For the purpose, an increasing number of entrepreneurs carry out activities aimed at offering direct solutions without exerting pressure on the state budget. This way, they become social entrepreneurs. In a move to facilitate the development of social entrepreneurship and to support this area for promoting good practices, the Organization for the Development of the Sector of Small and Medium-Sized Enterprises of the Republic of Moldova (ODIMM) launched a campaign to inform about and promote social entrepreneurship. According to statistics, European social economy employees over 14 million paid employees, which is equal to 6.5% of the working population. Approximately one in four European businesses has the status of social enterprise. Compared with the EU average, the Republic of Moldova is acutely short of capacities to provide social, inclusion, education and health services. Also, the Republic of Moldova lacks capacities to protect the environment, primarily to collect, recycle and store waste and to manage protected areas. This shortage should be regarded as a priority by which the development of social enterprises is supported. “At the central and local levels, companies need to be subcontracted to provide social and environmental services,” said Iulia Costin, ODIMM director general.
Final vote in favor of annulling offshore secret
The offshore secret will be annulled in a move to ensure maximum transparency in the activity of companies in the Republic of Moldova. Parliament on October 28 gave a final reading to such a legislative proposal and adopted it by 74 votes in favor. The bill contains amendments to the law on the state registration of individual entrepreneurs and legal entities. Its main provisions oblige the Public Services Agency to ensure the availability of information about effective beneficiaries. Under the document, there will be published the list of the effective beneficiaries of all the companies with founders in jurisdictions that do not ensure transparency. The citizens’ access to information from the State Register about the effective beneficiaries will be ensured by the Public Services Agency. This will be available on all the existing platforms where open data about companies are published.
Deputy Prime Minister Nicu Popescu signs Protocol to Interbus Agreement in Brussels
The Protocol to the Agreement on the international occasional carriage of passengers by coach and bus (Interbus Agreement) was signed by Deputy Prime Minister Nicu Popescu during his visit to Brussels. The document offers the carriers in Moldova the opportunity to sign partnership agreements with representatives of transport companies of the destinations states, IPN reports, quoting the Ministry of Foreign Affairs and European Integration. “For our passengers, this document that refers to international carriage of passengers by coach and bus ensures a high level of harmonization of the technical conditions applying to the units of transport that provide occasional international services in Europe,” stated Nicu Popescu.
Energy efficiency is our most important energy resource, expert
Moldova imports about 75% of the energy it needs, being dependent on these imports. “Considering this, the most important energy resource for us is energy efficiency,” said Alexandru Ciudin, director of the Agency for Energy Efficiency (EEA), during a EU Debates Cafe video conference. Organized by the Institute for European Policy and Reform (IPRE), the event addressed key solutions for strengthening energy independence and security. Ciudin noted that Moldova was the first country in the Eastern Partnership to transpose the EU Energy Efficiency Directive into national law. The reduction of energy consumption, as an effect of implementing energy efficiency measures, as well as through the introduction of renewable sources, helps reduce energy imports and improve Moldova’s energy independence.
● FRIDAY, October 29
Maia Sandu: Government does not say gas price so as not to prejudice next tender contests
The Government does not provide details about the purchase price of gas from alternative sources so as not to prejudice the next tender contests and to keep the possibility of having more advantageous bids, lower than the price paid by the Government or Energocom, at the next tender contests, President Maia Sandu explained in a news conference held after the Supreme Security Council’s meeting that centered on the country’s energy security. Asked why the Government does not want to say the purchase price of gas from alternative sources when the state-run company Energocom buys gas with public money, being requested to pronounce on transparency in the use of this money, President Sandu said the Government already explained that the purchase prices are the market prices, but the exact price is not made known because purchases continue to be made and, if the price is made public today, tomorrow or the day after tomorrow all the bidders will make offers according to this price, not lower ones. Over the next few weeks, the Government will not yet disclose the purchase price, but can later specify the bought quantity and the price.
Andrei Spînu after talks with Gazprom: Discussions are constructive in character
The discussions on the purchase of gas from Russia are constructive in character and the efforts to find a common point in the interests of the sides are intense, Deputy Prime Minister Andrei Spînu stated after the talks held in St. Petersburg. Andrei Spînu said that in the discussions with Gazprom head Alexei Miller, he presented Moldova’s position – that they want a contract for the supply of gas similar to the one applied the previous years. As regards Moldovagaz’s debt, the Government of the Republic of Moldova considers an audit should be conducted in this regard.
NAER extends deadline for applying electricity market rules
The Administration Board of the National Agency for Energy Regulation (NAER) decided to extend the time limit for applying the electricity market rules approved last August. The new deadline is January 1, 2022. According to NAER, the new time limit was coordinated with the Secretariat of the Energy Community and with national electricity market operators. By this decision, additional time was offered for identifying optimal instruments that can contribute to solving the problem of imbalances caused by unauthorized entities working in the Transnistrian region. The decision was also influenced by the difficult situation in the energy system of the country and the region, with most of the countries deciding to protect the own procedures and consumers. The Agency also approved the regulations on the authorization of use of electrical installations and the regulations on the authorization of electrotechnical laboratories that ensure regulated and non-discriminatory access for all the applications that want to obtain such authorizations.
City Breaks by Iasi-Chisinau-Odessa train
Private and public representatives from Romania, the Republic of Moldova and Ukraine met in Odessa at an event to discuss the launch of the Iasi-Chisinau regular train route synchronized with the existing Chisinau-Odessa route. The goal of the event was to consult the key players from the three countries so as to adjust the timetable of routes in a bid to realize the regional tourism potential by launching a train route that connects the three cities, offering tourists the possibility of going on city breaks. In a news conference at IPN, president of the Employers’ Association of the Tourism Industry of Moldova Sergiu Manea said the objective was to bring together key participants that will cooperate to ensure a favorable climate for restoring regional tourism by the synchronized Iasi-Chisinau-Odessa train route. As a result of the event, it was decided to constitute a working group consisting of specialists from the three countries. During the most difficult periods, regional tourism is possible if the anti-pandemic rules are obeyed. The experts will work on tourist routes, while the people will be motivated to choose a short visit by travelling to one city or even to the tree cities.
Sergey Pușcuța quits as State Tax Service director
Sergey Pușcuța vacated the post of director of the State Tax Service. The information was confirmed for IPN by the Service’s spokesman Adrian Platon. Sergey Pușcuța leaves out of his own free will. His resignation was signed by the minister of finance. Pușcuța will yet fulfill his duties as director of the State Tax Service until October 31. Sergey Pușcuța headed the State Main Tax Inspectorate in 2005 – 2008 and in 2016 – March 2017 and then the State Tax Service in 2017-2019. Later, he held the post of minister of finance. In 2021, he returned to the post of director of the State Tax Service.
Vladimir Socor: Gas crisis and “Transnistrian case” – two separate tracks
Dmitry Kozak, the deputy head of Russia’s Presidential Administration, hosted negotiations in Moscow on October 7 and October 21–22, with Moldovan delegations headed both times by Deputy Prime Minister Vladislav Kulminski. Neither of them specializes in energy or any economic matters. Each of them is responsible for negotiations on the Transnistria conflict, says an opinion article by Vladimir Socor, a senior fellow of the Jamestown Foundation. According to Moldovan insiders, Kozak did make a number of specific proposals regarding Transnistria on October 7 informally, not in writing but verbally for plausible deniability. On October 13, according to Chisinau insiders, Kozak’s office followed up, asking Chisinau whether it could offer a concept for a sustainable resolution of the Transnistria conflict.
● SATURDAY, October 30
NBM maintains base rate at 5.5 percentage points
The Executive Board of the National Bank of Moldova in the monetary policy meeting of October 29, 2021 voted to maintain the base rate applied to the main short-term monetary policy operations at the current level of 5.5 percentage points, IPN reports, quoting a press release of the Bank. The NBM took into account the pressures from domestic supply and aggregate demand (especially in the last 4 months) and supported by the increase of the population’s income, increasing the volume of consumer loans and of the mortgage ones. An important factor was also the uncertainty associated with the global energy crisis - rising prices for natural gas and oil on the international market that will slow global economic activity with repercussions on domestic economic demand and activity. The National Bank of Moldova noted it will continue to closely monitor developments in the domestic and international environments and is ready to come up with the necessary measures to meet the fundamental objective of ensuring price stability.
Terms of contract with Gazprom should be made known, opinions
Former and current MPs and representatives of civil society demand that the authorities should make known the terms of the deal struck with Gazprom. Representatives of the parliamentary opposition call on the Government to swiftly agree a mechanism for compensating residential consumers for the tariffs so that the citizens with low incomes cope with the higher gas and electricity bills. Energy experts said the decision to sign a new contract with Gazprom for a five-year period was most probably taken at the insistence of the Russian side. As the Ministry of Infrastructure and Regional Development announced, the sides agreed to keep the old price calculation formula.
Price of Russian gas for Moldova can rise to US$500-600, TASS sources
The price of Russian gas for the Republic of Moldova based on the new contract with Gazprom can rise to US$500-600 per 1,000 cubic meters of gas. The information was offered to TASS by a source close to the talks. The new contract envisions also the payment of the debt of over US$700 million for the gas supplied to Moldova the previous years. The quoted source said that in 2021, the price of gas for the warm period is calculated based on the market price, when demand declines together with the cost of gas. During the cold period of the year, the price is related to the situation on the fuel oil market, which enabled the country to significantly economize. Earlier, the scheme was applied to the whole quantity of gas, but now Moldova in the first and fourth quarters will buy 70% of the gas at the price calculated based on the price of oil, while the rest – at the market prices. In the second and third quarters, the price for 30% of the gas will be related to the price of oil, while the rest to the market prices.
Moldova will pay about US$450 for gas in November, Andrei Spînu
The new contract with Gazprom stipulates the price formula proposed by the Moldovan delegation, which is based on a particular ratio of the market prices of gas and oil. As it is a commercial relationship between Moldovagaz and Gazprom, the formula will be made public if the two companies decide to do this. Based on the current market prices, for November the price of gas will be about US$450 per 1,000 cubic meters of gas. Later the price will decline depending on the gas quotations on stock exchanges, said Deputy Prime Minister Andrei Spînu, Minister of Infrastructure and Regional Development, who negotiated the new contract with Gazprom. In a post on Facebook, the official said the signed protocol does not stipulate any political conditions and does not mention the Transnistrian region. As to the debt of Moldovagaz, it was agreed to conduct an independent audit at the company in 2022. Following the audit, the size of the debt will be determined and new talks will be held to agree the debt repayment schedule.
