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Moldova: A Year of Action towards a Social and Economic Transition
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AFD Group has accelerated its activity in Moldova to address the numerous crises affecting the country, notably the outbreak of war in neighboring Ukraine. But the long-term objective remains the same: to assist the country in its efforts to build a fairer and more sustainable economy and to align itself with the European Union.
Since AFD Group opened its office in Chisinau in February 2022, its teams have been working effectively with their Moldovan partners to mitigate the economic and social consequences of the Russia-Ukraine conflict.
In June 2022, the French government allocated a €15 million budget support loan to the Moldovan State via AFD to maintain essential services for citizens. A €60 million loan co-financed with the World Bank is also supporting the energy and railway reforms. These are key sectors of the transition towards a low-carbon economy and part of the effort to integrate into the European Union (EU). The first projects to rehabilitate tracks will restore, upgrade and develop transport infrastructure.
In the private sector, Proparco signed its first operation in Moldova in May 2022 to help the country's main microfinance institution, Microinvest, serve a greater number of microentrepreneurs and SMEs, especially companies in rural areas and in the agriculture sector. This project aims, directly and indirectly, to help create or safeguard 3,600 jobs over the next 5 years.
Further reading: AFD Group Launches its First Operations in Moldova
Supporting civil society organizations on the ground
AFD was keen to support civil society organizations involved in the humanitarian response to the Russia-Ukraine war, especially to help cope with the arrival of Ukrainian refugees. In partnership with Fondation de France, a €2.6 million grant has been paid to three French organizations working on the ground in Moldova: Solidarités International, Médecins du Monde and Handicap International.
These funds will serve to increase the resilience of Moldovan society in the sectors of health, education, employment and the inclusion of people with disabilities. Over time, 20 schools will receive support, 900 adult refugees will be assisted with their return to employment, and Ukrainians arriving in Moldova will benefit from 80,000 medical and psychosocial consultations.
Strengthening the rule of law
All the while, Moldovan authorities are working to revamp its financial system, since it was shaken by a massive case of bank fraud in 2014. Some $1 billion was spirited away, representing 12.5% of national GDP. Expertise France, AFD Group’s subsidiary for international technical cooperation has deployed an international expert to assist the Moldovan government in the recovery of stolen assets.
In partnership with Lithuania, Expertise France is also implementing the Moldovaap project, which aims to improve transparency, accountability and access to the justice system.
“We’re providing long-term support to move towards convergence with EU standards and towards a greener and fairer economy,” says Cécile Couprie, AFD’s Regional Director for Eurasia.
Further reading: AFD and Fondation de France to Support Refugees from Ukraine in Moldova
Technical assistance is also being provided, not least to the manager of the Moldelectrica power grid, the national railway company CFM, and stakeholders in the forest policy. “These programs are a first step towards a more extensive partnership over several years,” says Cécile Couprie, “to assist Moldova with its many transitions.”