Moldova to use 100 mln euro EBRD loan to import electricity instead of gas

CHISINAU. March 27 (Interfax) - The Moldovan government has decided to import electricity with the loan of 100 million rubles that the European Bank for Reconstruction and Development extended to the country earlier to buy gas, the government's press service reported.

The Cabinet on Wednesday ratified the relevant changes to the loan agreement with the EBRD under a project to secure natural gas supplies.

"The goal of these changes is to allow for the possibility of using the first tranche in the amount of 100 million euros from the main agreement to purchase electricity, without affecting the maturity of the tranche or the financial terms set by the original agreement," the press release said.

Under the amended agreement, state company Energocom, which by decision of the government handles centralized imports of electricity from the European Union, will use 48 million euros of the 100 million euro tranche. This amount is also specified in the law on the state budget for 2025, the release said.

The Moldova Gas Security Supply project for 2022-2025 is being financed with an EBRD loan of 300 million euros.

The Moldovan Energy Ministry said the government has extended Energocom's authority for centralized purchases and imports of electricity until the end of 2025. "Therefore, the company will continue to purchase the necessary amounts of electricity," the ministry said.

The ministry recalled that Energocom has been buying electricity from various sources since January 1, 2025, including under bilateral contracts with suppliers and producers in Romania and Ukraine, from the energy market and from local renewable energy sources.

"[...] by centralizing electricity purchases, SA Energocom will contribute to avoiding constraints related to the use of interconnection capacity and preventing the occurrence of congestion that could negatively influence the final purchase price of electricity," the ministry said.

Moldova imported electricity from the Moldavskaya GRES (MoldGRES) power plant in Transnistria until January 1, 2025, when the latter was cut off from Russian gas supplies amid Ukraine's refusal to renew a transit agreement and a dispute over a Moldovagaz debt of $709 million to Russia's Gazprom that the Moldovan authorities do not acknowledge. In light of this, Chisinau ramped up imports of more expensive electricity from Romania. Supplies of the more expensive imported electricity are subsidized for end customers with funding from the EU. Subsidies will total 151 million euros this year.