With ongoing support from the World Bank, Moldova confronts economic hurdles and fosters resilience.

The World Bank Executive Board has approved the second Emergency Response, Resilience, and Competitiveness Development Policy Operation (DPO2) for the Republic of Moldova on May 25, 2023. Moldova has been severely affected by the spillover effects of Russia’s aggression against Ukraine, resulting in a significant decline in gross domestic product due to trade, remittances, energy crises, and disrupted climate-related weather conditions. The approved budget support of $134.3 million aims to strengthen resilience, mitigate the socio-economic impact of the crisis, and reduce vulnerability to future shocks.

DPO2 focuses on providing legal status and integration assistance to Ukrainian refugees, strengthening social protection programs for affected households, improving energy efficiency, strengthening the legal framework for deposit guarantees, corporate governance of state-owned enterprises, supporting the restructuring of the railway sector, and facilitating the digitization of public services for businesses. Inguna Dobraja, World Bank Country Manager for Moldova, said that this emergency budget support, funded by development partners, will help mitigate the continuing impact of the Russian invasion of Ukraine on refugees and households.

The project is part of a co-financing package to Moldova from corresponding international partners. Moldova Development Policy Multi-Donor Trust Fund (MDTF) has provided $9.3 million in co-financing, and DPO2 benefits from a $100 million IBRD loan. The MDTF has already received development partner contributions from the United States, Norway, Ireland and Sweden, with additional partner support.

DPO2 aligns with the priorities of the new World Bank Country Partnership Framework with Moldova as part of a broader effort to assist the Moldovan authorities in responding to the immediate impact, solving the energy and refugee crises while building resilience to future shocks. The operation is also aligned with the World Bank Group’s Global Crisis Response Framework.

The World Bank portfolio now includes 11 active projects totaling $608 million, covering regulatory reform and business development, modernization of government services, tax administration, land registration, education, roads, health, the social sector including COVID-19 emergency response, agriculture, water and sanitation, and energy. The World Bank has allocated more than $1.3 billion to over 60 projects in Moldova since the country joined the World Bank in 1992.

DPO2 is complemented by a comprehensive technical support program that includes just-in-time technical advice on energy security, efficiency, and social protection. The World Bank is committed to supporting Moldova in its immediate and long-term transformation.

Press Release Number: 2023/ECA/121

Chisinau Contact: Boris Ciobanubciovanu@worldbank.org

Washington Contact: Sona Panajyanspanajyan@worldbank.org

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