Moldova to Build Economic Resilience and Enhance Competitiveness, with World Bank Financing
WASHINGTON – The World Bank’s Board of Executive Directors has approved an Emergency Response, Resilience and Competitiveness Development Policy Operation (DPO) in the amount of $159.24 million for the Republic of Moldova. This budget support will help the Government of Moldova mitigate the impacts of the war in Ukraine on refugees and households, as well as build resilience and enhance competitiveness to reduce vulnerabilities to future shocks.
Moldova has been beset by multiple shocks in recent years, from the COVID-19 pandemic to a severe drought that reduced agricultural production by 34 percent in 2020, and the European gas crisis that pushed gas prices up by around 400 percent in the second half of 2021. Just as Moldova was emerging from these shocks, the social and economic spillovers from the war in Ukraine have put at risk its short-term economic recovery and its long-term economic prospects.
“The series of shocks that has hit Moldova recently has significantly impacted Moldovan citizens, but especially poor families and small businesses,” said Inguna Dobraja, World Bank Country Manager for Moldova. “While responding to the unprecedented and immediate challenges posed by the war in Ukraine, the Government is committed to addressing the unfinished development reform agenda to support the country’s economic, social, and structural transformation. This budget support will help the government respond to the country’s immediate needs, while maintaining momentum in the long-term agenda of building resilience and enhancing competitiveness in Moldova”.
This operation is part of a package of coordinated financial assistance from international partners, including the IMF, the EU, and the EBRD, prepared in response to the ongoing socio-economic emergency in Moldova. The DPO includes IBRD financing with a loan in the amount of $43 million and a concessional contribution on a non-reimbursable basis under the Global Concessional Financing Facility (GCFF) in the amount of $9.24 million, as well as an IDA credit in the amount of $107 million. Agence Française de Développement is expected to provide parallel financing in the amount of Eur60 million.
Since Moldova joined the World Bank in 1992, over $1.3 billion has been allocated to more than 60 operations in the country. Currently, the World Bank portfolio includes 12 active projects with a total commitment of $638.1 million. Areas of support include regulatory reform and business development, modernization of government services, tax administration, land registration, education, roads, health and social sectors, including the COVID-19 emergency response, agriculture, water and sanitation and energy.