The state will borrow €5 million from Poland’s Bank Gospodarstwa Krajowego (BGK) to support the development of small and medium-sized enterprises. The draft loan agreement was approved by the Cabinet on Wednesday, IPN reports.

According to the draft, the loan from BGK will be repayable during seven years, with a grace period of 12 months. The loan will be disbursed in two tranches. The first tranche of €2 million will be disbursed in the first quarter of 2024, and the second tranche of €3 million – in the second quarter of 2024.

The market interest rate (contractual rate) is 3.65% annually and is fixed. It has the following two components: 0.5% annually which will be paid by the Republic of Moldova and 3.15% annually (difference up to contractual rate), which will be subsidized by the European Commission to BGK from the grant approved for this purpose.

The Ministry of Economic Development and Digitalization said that this agreement is an important impetus for the development of small and medium-sized enterprises in the Republic of Moldova as it offers them access to long-term financial resources at low costs. 

Through this loan, SMEs will be able to finance investment projects in the field of energy efficiency, renewable energy transition and climate change adaptation measures. According to the Ministry, these investments will help enhance the competitiveness of small and medium-sized enterprises, reduce greenhouse gas emissions and create new jobs.