The Minister of Finance and the Governor of the National Bank of Moldova signed a €100 million Loan Agreement with the European Union (EU). The objective of this loan is to reduce the country’s external financing constraints, to mitigate the balance of payments and budget needs, and to support Moldova in the current financial situation.
On July 21, the Minister of Finance, Serghei Pușcuța and the Governor of the National Bank of Moldova, Octavian Armașu, signed the Loan Agreement on Macro financial Assistance worth €100 million between Moldova and the EU.
According to the Agreement, the objective of this loan is to reduce the country’s external financing constraints, mitigate the balance of payments and budget needs, and to support Moldova in the current financial situation.
“The loan is to be granted in two equal installments. The disbursement of the first tranche is conditional on the signing of the Memorandum of Understanding, while the second tranche will depend on the progress made in implementing the provisions of the Memorandum. For the disbursement of the second tranche, six actions are proposed for implementation,” states the Ministry of Finance in a press release.
The loan duration is a maximum of 12 months, and its maturity is a maximum of 15 years. The loan will be repaid in a single installment. The interest rate applied for each tranche will depend on the cost at which the European Commission will borrow on the international financial market.
On July 10, the EU has approved the second and final disbursement for Moldova worth €30 million. It is composed of €10 million in grants and €20 million in low-interest, long-term loans. The programme is designed to assist Moldova in covering its external financing needs, which is especially important in light of the coronavirus pandemic while implementing a wide-ranging and ambitious reform agenda.