CHISINAU (Moldova), June 24 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said it is providing a 300 million euro loan ($315 million) to Moldova to boost its energy security by acquiring strategic gas reserves to supplement those currently provided by Russia through Ukraine.
The loan is for on-lending to the state-owned energy trader JSC Energocom to procure gas on European Union hubs, the EBRD said in a press release on Thursday.
The financing will cover up to one-fifth of Moldova’s planned gas imports for 2022, which are vulnerable to potential interruption as a result of the war on Ukraine. Currently these imports all come from the Russian company Gazprom, under a contract that expires in 2026, according to the EBRD.
Moldova's government applied for the EBRD financing in March.
The loan, made under the bank’s 2 billion euro Resilience and Livelihoods Framework supporting Ukraine and neighbouring affected countries, will be divided into two tranches. A 200 million euro emergency tranche will be used in case of supply disruption, while a further 100 million euro will be used to create a strategic gas reserve to be stored in Romania or Ukraine to avoid seasonal price spikes and improve energy security.
The aim is to ensure uninterrupted gas supply in Moldova and safeguard the basic needs and economic livelihoods of 2.7 million Moldovans and refugees from Ukraine, the bank said.
"These EBRD projects give a lifeline for Moldova, both by helping to diversify its supply sources and by making it possible for the country to import 100 per cent of its energy needs from the EU via the interconnector in summer and up to 60% in winter," the EBRD’s managing director for Eastern Europe and the Caucasus, Matteo Patrone, said.
The Moldovan government has authorised Energocom to procure gas from alternative sources on the spot market by running tenders mainly on the EU and Ukrainian borders. This enables the EBRD to disburse the loan directly to pre-qualified EU suppliers selected by Energocom and agreed by the EBRD in line with EBRD procurement rules.