Executive empowers Mariana Durlesteanu to negotiate loan with Russia

The Cabinet empowered Minister of Finance Mariana Durlesteanu to negotiate the allocation of a US$150 million loan with Russian by the end of this year, Info-Prim Neo reports. Moldova’s economy is directly dependent on the developments in the partner countries, which now experience an acute recession. As a result, the exports and remittances have decreased considerably. The demand on the home marked also declined, leading to lower imports. Investments are needed in infrastructure. Under such circumstances, the only solution for covering the capital expenses and financing projects in such areas as healthcare, education and social protection is to attract foreign financial resources, says the informative note to the Government decision. The Moldovan and Russian authorities agreed on a US$150 million loan, while the State Duma of Russia approved the granting of the loan to support investment projects to rehabilitate the road infrastructure and the water supply systems and to cover social expenses, the note also says. The loan will be released on condition that Moldova pays the interest and repays the debts on the loans granted by Russia earlier. The US$150 million loan will be repaid in 15 years in four equal yearly installments – on February 15, May 15, August 15 and November 15. The last interest rate is to be paid on May 15, 2024. The interest will be equal with the London Interbank Offered Rate (or LIBOR) on the three-month deposits in US dollars plus a yearly margin in percentage that is not specified in the decision. When Moldova’s outgoing president Vladimir Voronin paid a visit to Moscow, his Russian counterpart Dmitry Medvedev expressed readiness to provide a US$150 million loan to Moldova. But the decision was to be considered by the Russian State Duma.