World Bank approves new financing worth 30 million dollars for Moldova

Chisinau, 6 July /MOLDPRES/ – The World Bank Group’s Board of Directors onj 5 July approved a US$ 30 million Economic Governance Development Policy Operation (EGDPO) for Moldova. The money is available as a result of the carrying out by the government of reforms in the economic governance sector and namely the public money management, improving the business environment, including the banking sector, agriculture and energy sector.  

The goal of the financing is to ensure the macro-economic stability and stimulate the economic growth, the Finance Ministry has said. According to the ministry, Moldova’s Economic Management DPO-3 is a key component of the World Bank’s Moldova Country Partnership Framework for 2018-2021 and supports the Government of Moldova’s National Development Strategy “Moldova 2020”. The money is provided in form of budgetary support based on the actions established in the matrix of policies with Blend-type concession conditions.  

A press release by the World Bank reads that EGDPO provides resources to help the Republic of Moldova reduce fiscal risks and level the playing field for private sector development.

“The approval of this financing is an acknowledgement of the recent reforms implemented in Moldova to enhance the pension system, increase functionality of the National Integrity Authority, strengthen banking sector governance, and improve the business environment, to name a few,” said Anna Akhalkatsi, World Bank Country Manager for Moldova. "We are committed to supporting the Moldovan authorities in further reforms that are needed to help businesses grow and create jobs for ordinary citizens.”

The Economic Governance Development Policy Operation will foster the sustainability of the pension system, improve health outcomes through higher tobacco taxes, strengthen the transparency of state-owned enterprises through better financial reporting requirements, and advance transparency in the public sector through an enhanced assets declaration regime for high-level officials. The operation also contributes to the development of the private sector by streamlining the process of obtaining authorizations and permits by firms and simplifying domestic procedures to boost agricultural productivity. 

Finally, this development policy financing will help strengthen the governance regime of the banking sector and improve transparency in the electricity procurement process.   

“Economic growth is expected to moderate in the medium-term and remain highly reliant on consumption. Boosting growth and maintaining macro-economic stability requires addressing economic governance challenges that undermine both public and private sector efficiency,” said Elisa Gamberoni, World Bank Senior Economist for Moldova. “The focus of this operation is to address key economic governance bottlenecks, and reduce medium-term fiscal risks and foster private sector development.”

Since Moldova joined the World Bank Group in 1992, over US$ 1 billion has been allocated to approximately 60 projects in the country. Currently, the World Bank portfolio includes 10 active projects with a total commitment of US$ 357.9 million. Areas of support include regulatory reform and business development, education, e-governance, healthcare, agriculture, local roads, environment, and more.

The International Finance Corporation’s committed portfolio in Moldova is US$ 53.8 million (US$ 50.9 million outstanding), and consists of 95% loans and 5% equity. The Multilateral Investment Guarantee Agency has provided guarantees totaling US$ 95 million. Both institutions are members of the World Bank Group.

(Reporter V. Bercu, editor L. Alcaza)