Moldova Receives a €39.94 Million Grant to Build a Power Link with Romania
The Cabinet of Ministers approved the Draft Decision regarding the interconnection of electricity networks between Moldova and Romania. The project is worth €261 million and it will help Moldova to connect its electricity network with Romania’s, a critically important step for the diversification of Moldova’s electricity resources.
Moldova and the European Bank for Reconstruction and Development (E.B.R.D.) signed the Grant Agreement regarding the interconnection of electricity networks with Romania on September 26, 2019.
The total value of the project is €261 million. The E.B.R.D. and the European Investment Bank cover part of the financial resources needed for the implementation of the project, worth €80 million each. The World Bank also contributed to the project through the International Development Agency with a €61 million loan. And the European Union contributed with a grant worth €39.94 million, through E.B.R.D.
On November 12, during the Government meeting, the Cabinet of Ministers approved the Draft Government Decision regarding the Grant Agreement between Moldova and E.B.R.D.
The Minister of Economy, Vadim Brînzan stated within the Government meeting that the implementation of the project of interconnection of Moldova’s electricity system with the Romanian one will allow the creation of a transparent and competitive electricity market in Moldova and the integration in the regional market of electricity of the European Union.
The E.U. grant will co-finance the construction of a 600 MW back-to-back converter substation in Vulcănești. The World Bank loan will finance the construction of a new 400 kV high-voltage overhead line between Vulcănești and Moldova’s capital of Chișinău, as well as the expansion and upgrade of associated high voltage substations.
The financial resources granted in the form of a grant are destined for the works, goods, and services necessary for the construction of the Back-to-Back station in Vulcănești.
The interconnection is of critical importance for the diversification of Moldova’s electricity resources. Currently, the country depends on a single power plant fuelled by natural gas, oil and coal, and electricity imports from Ukraine for up to 80 percent of its electricity supply.
The link to the Romanian electrical network will considerably enhance the stability and reliability of its power supply – a prerequisite for the country’s economic development.
The diversification of electricity resources will open up Moldova’s electricity market to increased competition, with access to the European market generating economic benefits for both companies and citizens. The project will ultimately pave the way towards Moldova’s integration into the European electricity grid operated by the European Network of Transmission System Operators for Electricity.
The interconnection will be built by Moldova’s public electricity utility Moldelectrica between 2019 and 2024.
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