WASHINGTON, December 5, 2022-The World Bank approved today a grant financing package for the Supplemental Development Policy Operation (DPO) in the amount of $43.76 million for the Republic of Moldova. The grant financing for this budget support operation was funded by the Multi-Donor Trust Fund for Co-financing of the Moldova Development Policy Program (MDTF). The MDTF was established by the World Bank in recognition of the impact of the war in Ukraine, including the country’s generous hosting of refugees, and includes contributions from Norway’s Ministry of Foreign Affairs and the United States Agency for International Development (USAID), with additional donor funding expected in coming months.
This support will help Moldova mitigate the spill-over economic impacts of the war in Ukraine on refugees and households, as well as build resilience and enhance competitiveness to reduce vulnerabilities to future shocks. The current package supplements the earlier budget support offered to the Republic of Moldova in June 2022 in the amount of $159.24 million.
Moldova has been beset by multiple shocks in recent years, from the COVID-19 pandemic to a severe drought that drastically reduced agricultural production in 2020, and the gas crisis that pushed prices up by around 700 percent in just one year. As Moldova was coping with these shocks, the social and economic spillovers from the war In Ukraine, including the recent emergencies in the energy sector, have put the country’s short-term recovery and long-term economic prospects at great risk.
Since Moldova joined the World Bank in 1992, over $1.3 billion has been allocated to more than 60 operations in the country. Currently, the World Bank portfolio includes 12 active projects with a total commitment of $650.4 million. Areas of support include regulatory reform and business development, modernization of government services, tax administration, land registration, education, roads, health and social sectors, including the COVID-19 emergency response, agriculture, water and sanitation and energy.