How €1.8 billion granted by EU to be used for Moldova's development

Chisinau, Nov 29 /MOLDPRES/- 1.8 billion euro Economic Growth Plan for Moldova, presented by the European Union, should enable our country to achieve an annual economic growth of 5-8% in the medium term. The funds will be directed to support a broad set of reforms and investments designed to generate concrete benefits for both citizens and entrepreneurs. The projects that will receive funding over the next three years are expected to be approved in the first quarter of next year, and their implementation will start immediately after this process is finalized.

The Ministry of Economic Development and Digitization (MDED) said upon MOLDPRES' request that the allocated amounts will include both concessional loans and non-reimbursable grants, aimed at supporting key priorities in the reform agenda, such as modernization of infrastructure, human capital development and promotion of green transition. Disbursements will be made semi-annually, after verification that the conditions have been met.

Projects proposed for funding are set up by the responsible ministries and assessed according to their importance and impact on the economy. They are then approved for funding. The whole process related to the Growth Plan is coordinated by the Coordination Council, a structure established by decision of the Prime Minister of the Republic of Moldova.

Specific details on the allocation of the funds will be announced following the approval of the Reform Agenda by the European Commission, scheduled for early 2025.

How the Growth Plan will change the Moldovan economy

The Growth Plan will create a more stable and predictable economic environment, which is a key factor in attracting foreign capital, according to MDED. The institution notes that investors will be motivated not only by the opportunities of access to a large market, but also by the relatively lower labor costs compared to other European countries. EU support will also reduce the risks of economic instability, giving investors the certainty that Moldova is on a path of development and European integration.

State aid for the industrial sector through reconstruction of factories and plants

The Growth Plan will mobilize more resources for our companies, allowing them to invest in new technologies and become more competitive. "In parallel, we will introduce state aid mechanisms aimed at directly supporting the industrial sector by rebuilding factories and plants. We will also provide financial resources to municipalities so that they can improve people's lives in every locality. This is an important step towards our vision of bringing Europe and European standards of living here in Moldova", emphasized MDED.

These areas are fundamental to Moldova's economic growth and resilience, says MDED, and are prioritized in the European assistance plan because of their potential to generate jobs and increase regional and international competitiveness.

Deputy Prime Minister Dumitru Alaiba: The European Union has been and remains a reliable partner

Deputy Prime Minister, Minister of Economic Development and Digitalization Dumitru Alaiba told MOLDPRES that the Growth Plan presented by the EU is a clear sign of trust that the European Union gives to our country, a sign that encourages us to look optimistically to the future.

We deeply appreciate this support! The European Union has been and remains a reliable partner, and this partnership is becoming stronger as we move closer to integration into the European family," said Alaiba.

The largest financial support package granted to our country since independence

The €1.8 billion Economic Growth Plan was announced on October 10 by European Commission President Ursula von der Leyen. It is the largest financial support package since independence.

The basic objective of the plan is to bring our country closer to EU membership by significantly accelerating reforms and investments in the shortest possible time. More specifically, the plan involves the construction of roads, bridges, hospitals, development of railway infrastructure, financial support for businesses in the country, attracting investments, completion and start-up of new power lines, along with numerous other major projects, MDED says.

Three main objectives of the Economic Growth Plan

The plan is structured around three main objectives: accelerating social and economic reforms and those related to strengthening the rule of law, expanding access to the European Union's single market and increasing financial assistance through a dedicated Reform and Growth Facility.

The acceleration of socio-economic and fundamental reforms focuses on improving economic competitiveness, resilience, developing social capital and strengthening fundamental rights, including measures to modernize and streamline public administration, fight corruption and improve the justice system.

Expanding access to the EU Single Market. The Republic of Moldova will benefit from opportunities for deep integration into the Single Market through alignment with EU standards in key areas such as energy, the digital market, free movement of goods and services, and recognition of professional qualifications.

Increased financial assistance through the Reform and Growth Facility for the Republic of Moldova, which will include both grant financial support and highly concessional loans of up to €1.8 billion for the period 2025-2027.

Where the money will go

The funds will be directed to support a broad set of reforms and investments designed to bring concrete benefits for citizens and entrepreneurs.

Some of the money will go towards improving the business environment, with a focus on financing for entrepreneurs, promoting exports, strengthening agriculture and consumer protection.

On infrastructure, investments will focus on modernizing transport networks, improving energy security, including through diversification of energy sources and energy efficiency of buildings and equipment. At the same time, priority will be given to achieving a high level of digitization of public processes and services to support both citizens and business.

In the area of economic governance, allocations will contribute to improving financial management, restructuring state-owned enterprises and developing a more efficient and transparent public administration system. These measures will create a more robust framework for sound and accountable management of public resources.

For human capital development, the funds will support reforms in education, aligning the vocational education system with labor market requirements and promoting access to quality social protection services. It will also focus on combating undeclared work and tackling tax evasion.

In terms of the green transition, the Plan will support the efficient use of natural resources and promote the circular economy to minimize losses and waste, thus contributing to a sustainable future.

Last but not least, the Plan aims to finalize a series of reforms and initiatives aimed at ensuring integrity in the public service, justice reform, prevention of money laundering and the fight against organized crime, thus strengthening the rule of law and citizens' trust in state institutions.

MDED emphasized that failure to meet these conditions may lead to the suspension or postponement of payments until the identified deficiencies are remedied. However, according to the institution, without clear commitments to the values and principles of the European Union, the Republic of Moldova risks missing the development opportunities that these funds can bring.