The EBRD is lending Moldova €300 million to boost its energy security by acquiring strategic gas reserves to supplement those currently provided by Russia through Ukraine. The loan is for on-lending to the state-owned energy trader JSC Energocom to procure gas on European Union hubs, IPN reports, quoting a press release.
The loan will finance up to one-fifth of Moldova’s planned gas imports for 2022, which are vulnerable to potential interruption as a result of the war on Ukraine. Currently these imports all come from the Russian company Gazprom, under a contract that expires in 2026.
The loan, made under the Bank’s €2 billion Resilience and Livelihoods Framework supporting Ukraine and neighboring affected countries, will be divided into two tranches. A €200 million emergency tranche will be used in case of supply disruption, while a further €100 million will be used to create a strategic gas reserve to be stored in Romania or Ukraine to avoid seasonal price spikes and improve energy security.
Recent progress in implementing the EU’s third Energy Package, and the commissioning of a gas interconnector between EU member Romania and Moldova in 2021, which was financed by the EBRD, means Moldova now has the technical wherewithal to substitute provision from EU hubs in case of supply disruption.
“These EBRD projects give a lifeline for Moldova, both by helping to diversify its supply sources and by making it possible for the country to import 100 per cent of its energy needs from the EU via the interconnector in summer and up to 60 per cent in winter,” said Matteo Patrone, the EBRD’s Managing Director, Eastern Europe and the Caucasus.
The Moldovan government has authorized Energocom to procure gas from alternative sources on the spot market by running tenders mainly on the EU and Ukrainian borders. This enables the EBRD to disburse the loan directly to pre-qualified EU suppliers selected by Energocom and agreed by the EBRD in line with EBRD procurement rules. The transaction is structured to ensure full transparency and traceability of loan proceeds.
The EBRD is a leading institutional investor in Moldova and, to date, has invested more than €1.5 billion in the country through 154 projects.
