EBRD Grants €150 Million Loan to Moldova for Vital Road Rehabilitation Projects

EBRD Grants €150 Million Loan to Moldova for Vital Road Rehabilitation Projects

(IN BRIEF) The European Bank for Reconstruction and Development (EBRD) has approved a €150 million loan for Moldova to support the rehabilitation of crucial roads, particularly around the capital, Chisinau. The loan will fund the expansion and enhancement of the M2 Chisinau ring road and the upgrade of the M1 Chisinau to Leuseni section, along with the acquisition of specialized equipment and software for a Road Asset Management System. These road improvements are part of the Trans-European Transport Network (TEN-T) and will bolster Moldova’s role as a gateway connecting the European Union to its west with eastern countries. The investment aligns with Moldova’s ambitions for economic growth, regional integration, and trade facilitation, especially with Ukraine and Romania, as part of the EU Solidarity Lanes initiative. Additionally, the EBRD is assisting Moldova in developing a national e-mobility strategy to promote electric vehicle fleets and charging infrastructure. This investment comes as Moldova seeks to strengthen its economic resilience amid the ongoing Ukraine-Russia conflict and enhance its strategic transportation links.

(PRESS RELEASE) LONDON, 26-Jan-2024 — /EuropaWire/ — The EBRD is lending €150 million to Moldova to finance the rehabilitation of key roads in Moldova and around its capital, Chisinau.

The loan will allow the government to upgrade and widen the M2 Chisinau ring road, upgrade the M1 Chisinau to Leuseni section, and purchase specialised equipment and software for a Road Asset Management System. The two roads are part of the Trans-European Transport Network (TEN-T), which makes Moldova the gateway between the European Union (EU) to its west and countries to its east.

The EBRD’s investment will support the Moldovan government’s efforts to ensure key road links are maintained to standards that will enable economic growth, regional integration and trade. Improving the two transport links will allow for a better transit connection between Moldova and its neighbours Ukraine and Romania, in line with the EU Solidarity Lanes initiative.

The investment is part of a large-scale road rehabilitation programme financed by the EBRD, under which more than €340 million has been provided to Moldova so far.

As part of the project, the EBRD is also helping the government develop a national e-mobility strategy that promotes the deployment of electric fleets and vehicle charging infrastructure in the country.

In November 2023 the European Commission recommended that the Council begin accession negotiations with Moldova, which was granted EU candidate status in June 2022. To secure sustained economic growth despite Russia’s war on Ukraine, it is vital that the country’s road sector provides improved access to EU markets, as well as maintaining access to its traditional markets to the east.

While the war and the sanctions imposed by the EU on Russia have severed these traditional trade links, Moldova’s strategic position is of great importance to ensure transport and continued trade flows are possible from Ukraine to Romania, to the Danube River via Moldova’s Giurgiulesti port, and to other EU countries.

Safe, well-maintained and modern road networks in line with international standards are key to this.

The EBRD is Moldova’s biggest institutional investor. Last year, the EBRD deployed €350 million of financing in Moldova, supporting energy security, improved infrastructure and connectivity as well as access to finance for the private sector with a special focus on SMEs.

Since the start of Russia’s full-scale invasion on neighbouring Ukraine, the Bank has provided almost €1 billion to Moldova to help mitigate the economic consequences of the war on the economy.

Overall, the Bank has invested more than €2.2 billion in 170 projects to date in the country, with 40 per cent of its portfolio in sustainable infrastructure.

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SOURCE: EBRD