EBRD, World Bank, EIB help finance Moldova power grid project
Moldova’s government and state power grid operator Moldelectrica have signed financing agreements worth over €260 million for the streamlining of the national power grid and its connection to Romania’s power grid.
The financing package for Moldova includes a €160million loan from the European Bank for Reconstruction and Development and European Investment Bank, a €40 million grant from the European Union, and a $70 million loan from the World Bank, amounting to around €264 million in total.
The EU grant will co-finance the construction of a 600MW back-to-back converter substation in Vulcanesti on the border with Romania. The World Bank loan will finance the construction of a new 400 kV high-voltage overhead line between Vulcanesti and Moldova’s capital Chisinau, as well as the expansion and upgrade of associated high voltage substations.
The project is scheduled for completion in 2024, two years later than initially planned.
The interconnection is of critical importance for the diversification of Moldova’s electricity supply.
Currently, Moldova operates a single, small power plant fuelled by natural gas, oil and coal. It depends on electricity imports from the separatist region Transnistria and to a lesser extent from Ukraine for more than 80% per cent of its electricity demand. The main electricity supplier to Moldova is a Transnistrian power plant, Kuchurgan, operated by Russian owners and which burns natural gas from Gazprom but never pays for it. This resulted in huge debts of over $6 billion that formally are owed by Moldova’s Moldovatransgaz, controlled by Gazprom.
