Moldova's FISM-II Project to be supplemented with $20m

The World Bank's soft loan arm, the International Development Association (IDA), will offer an additional $20m in financing for Moldova's second Social Investment Fund (FISM-II) Project, Info-Prim Neo reports. The loan agreement for the FISM-II Project was signed in 22 July and provided for SDR 13.8 million, the equivalent of about $20m. The total cost of the project exceeded $29m, including the contribution of the Swedish International Development Cooperation Agency (Sida) of about $3.5m, the contribution of the Moldovan government of $1.4 and, the contribution of the beneficiary community of $3.6m. As of October 2009, the offered loan was 95 percent used. The funds were used to finance rehabilitation projects in rural infrastructure, projects to build the capacities of communities and local administrations. The Moldovan government solicited the World Bank for additional financing, and on 4 May 2009 an agreement was signed providing for extra $5m. The financial crisis and the impossibility to make large investments from the budget determined the government to repeatedly ask the World Bank for a second supplement to the FISM-II Project. Considering the World Bank's positive answer, the Moldovan Government set up a task force headed by State Minister Victor Bodiu to negotiate the loan agreement. The funds could be used to finance community development projects, like repairs of roads, kindergartens, hospitals, schools in rural areas, as well as environmental projects. The expected terms of the loan agreement include a maturity of 20 years, with a grace period of 10 years, an annual interest of 0.75% and an annual commitment fee of up to 0.5%.