EBRD annual investment in Moldova hit an all-time record in 2017 as the Bank provided €130 million of financing to support the private sector and develop infrastructure.
The increase in financing came despite constraints such as the low level of domestic and foreign investment, bottlenecks in implementing infrastructure projects and remaining issues in the banking sector.
Dimitri Gvindadze, Head of the EBRD’s office in Chisinau, said: “The EBRD’s ‘boots-on-the-ground’ approach allows us to remain active in both the public and private sectors. We welcome the steps to improve governance and transparency in the banking sector that have been taken in 2017. By unlocking opportunities in the banking sector, the EBRD will be able to step up financing for small and medium-sized enterprises. We will continue working with the authorities to develop infrastructure in line with Moldova’s macroeconomic framework, which was agreed with the International Monetary Fund.”
The EBRD facilitated a breakthrough in the banking sector as Banca Transilvania announced its intention to invest in Victoriabank, Moldova’s third-largest lender. This will be the first time in a decade that a foreign bank investor will have entered the Moldovan market and is a major step towards the recovery and modernization of the financial sector.
The EBRD continues to prioritize the enhancement of Moldova’s energy security. Joining forces with the European Union, European Investment Bank and World Bank, the EBRD is co-financing Moldova’s electricity interconnections with Romania through a €80 million loan. This will introduce competition to the market and benefit customers.
The EBRD continued its support for Moldova’s capital, Chisinau, to finance energy efficiency improvements in public buildings. Better insulation, efficiency of heating, ventilation and air conditioning in kindergartens, schools and hospitals are expected to result in significant energy savings.
The Bank extended the second €27.5 million tranche of its €52.5 million loan to the state-owned railway company, Calea Ferată din Moldova, to improve railway infrastructure, upgrade rolling stock and modernize the company.
The EBRD continued financing private companies through its strong, long-term partner – Mobiasbanca - Groupe Société Générale. Financing came under the EU4Business-EBRD Credit Line, where the EU and the EBRD work together to expand access to finance for businesses aiming to take advantage of opportunities offered by the Deep and Comprehensive Free Trade Area with the EU.
Looking ahead, the EBRD, together with the International Monetary Fund, the EU and other key partners will continue efforts aimed at enhancing the resilience of the banking sector. It will work with reputable investors to restore transparency and good governance in banks in order to make more financing available to Moldovan businesses.
The EBRD will continue lending, directly and through banks, to Moldovan companies with viable business models and will finance public infrastructure projects.
In line with the priorities set out in the EBRD’s recently approved strategy for Moldova for 2017-2022, the engagement with the government will focus on improving the business climate, including through support for the Secretariat of the Economic Council of the Prime Minister. The EBRD will work with the authorities to support reforms in the area of public procurement.
The EBRD is the largest institutional investor in Moldova. Since the start of its operations in the country, the Bank has invested over €1.2 billion in almost 120 projects in Moldova’s financial, agribusiness, energy, infrastructure and manufacturing sectors.