Finance Ministry Outlines Conditions for Moldova to Receive EU Aid

Under the Moldova Development Plan adopted by the European Commission in October 2024, the country is set to receive the EU financial support package of approximately €1.9 billion (around 37 billion lei), of which €1.5 billion are loans. To obtain the loan, a bilateral interstate Agreement must be developed and concluded between the Republic of Moldova – represented by the Ministry of Finance and the National Bank of Moldova as the country’s agent – and the European Union, represented by the European Commission, according to mold-street.com. 75% is budget support, 25% is for investment projects The draft Agreement was published by the Ministry of Finance and consists of 24 articles and four annexes, which include provisions regarding the amount of financial assistance, the procedure for its provision, the necessary conditions for granting the loan, and so on. According to the Ministry of Finance, the overall goal of the Agreement is to support the implementation of the Republic of Moldova’s Reform Program, which promotes: - strengthening the rule of law and good governance; - supporting the transition to a green and digital economy; - enhancing economic and social resilience; - accelerating convergence with the European Union. A loan of €1.5 billion for the period 2025–2027 will be provided on favorable terms, with the allocated financial resources representing both budget support (75%) and financing for investment projects (25%). The deadline for submitting applications is June 30, 2029. Terms and conditions The document stipulates that the maximum loan repayment period is 40 years, including a grace period of up to 10 years. “The interest rate applied to each tranche will depend on the cost at which the European Commission borrows funds on the international financial market. Currently, Moldova has received loans from the European Union at rates ranging from 0.125% to 3.375%,” states the Ministry of Finance. The Agreement is expected to strengthen bilateral relations between the Republic of Moldova and the EU, reaffirming the country’s political commitment to the European integration process, and contributing to the enhancement of relations with EU member states and other candidate countries. It is also anticipated that the Agreement will have a positive impact on the economic and social development of the Republic of Moldova by promoting inclusive and sustainable growth, economic resilience, investment attraction, and infrastructure modernization. It should be noted that the €1.9 billion Moldova Development Plan, supported by the Reform and Growth Facility for the period 2025-2027, is the largest EU financial support package since Moldova gained independence. The government claims that the Plan and the loan will stimulate the Republic of Moldova’s economy, leading to an economic growth of 5% by 2028, compared to just 0.1% GDP growth last year. At the same time, it will bring the country closer to EU membership by accelerating reforms.