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European Neighbourhood Policy and Enlargement Negotiations
News article15 December 2021Directorate-General for Neighbourhood and Enlargement Negotiations

EU helps the Republic of Moldova to face the gas crisis

Moldova - gas support

On December 15th, in the margins of the Eastern Partnership Summit, Commissioner for Neighbourhhood and Enlargement, Olivér Várhelyi and Deputy Prime Minister, Minister of Foreign Affairs and European Integration of the Republic of Moldova Nicu Popescu signed a €60 million grant Financing Agreement to help the Republic of Moldova face its current severe gas crisis. This support was already announced by European Commission President Ursula von der Leyen at the outbreak of the energy crisis in the Republic of Moldova. The signature took place in the presence of the President of the European Commission and President of the Republic of Moldova H. E., Maia Sandu.

Commissioner for Neighbourhood and Enlargement Olivér Várhelyi said: “The EU continues to stand with the Republic of Moldova and its citizens. With this 60 million grant, the EU is providing immediate emergency help to the Republic of Moldova to deal with a crisis that could otherwise cause great hardship. This is the essence of the Eastern Partnership’s renewed agenda of fostering resilience, recovery and reform".  

This EU assistance will be provided through a new budget support programme to help the Republic of Moldova set up a support scheme for its most vulnerable citizens. The funds are expected to be disbursed at the end of this year.  

The EU is also preparing to offer the Republic of Moldova a new macro-financial assistance operation, intended to help alleviate the financing needs of the country, caused by the sharp increase in gas prices, in the short-to-medium term. This new operation will be jointly implemented with a new International Monetary Fund (IMF) programme.

Through the Service for Foreign Policy Instruments (FPI), the EU will also provide the Republic of Moldova with a €15 million grant. This grant will offer a first component to support those most affected by the crisis, and a second one to help build the Moldovan government’s capacity in energy reform.

In addition, the EU has helped the Republic of Moldova through immediate technical assistance and expertise in the energy sector. The EU and the Republic Moldova also began a High-level dialogue on energy. The EU remains ready to continue assisting the Republic of Moldova, in helping the country build capacity in the energy sector, improve energy security and efficiency, diversify supply sources and increase the importance of renewable energy sources.

The energy efficiency project in the Republic of Moldova is another example of the EU contributions to the region with two loans with EIB and EBRD worth €30 million each being acknowledged today, an earlier EU contribution of €15 million and additional support from the Republic of Moldova. The project is implemented under the umbrella of the Economic and Investment Plan for the Eastern Partnership and contributes an important deliverable   for the Eastern Partnership Summit

Background

The Republic of Moldova is currently facing a crisis in the gas sector due to supply shortage, which came about when the country’s supply contract was not renewed and would have ended by the end of October. On 22 October 2021, the Moldovan Parliament adopted a state of emergency for 30 days. On 29 October, the Republic of Moldova ensured a long-term gas supply contract at substantially higher prices. On 14 December, the government of the Republic of Moldova adopted a National Energy Crisis Action Plan to support vulnerable groups and improve long term energy security. The 60 M budget support contributes directly to this Plan.

The signing of this Financing Agreement builds on the EU assistance already provided to support recovery from the COVID-19 pandemic in the Republic of Moldova. This autumn the EU disbursed €36.4 million in budget support assistance and €50 million in the emergency COVID-19 macro-financial assistance, to the republic of Moldova, providing liquidity in the short term.

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