On July 4, 2023, it was announced that the United States would offer Moldova an additional grant of approximately $300 million. This grant is stipulated in the 15th Amendment to the Development Assistance Agreement between the Government of the Republic of Moldova and the U.S. Government for sustainable economic growth based on European integration. The Amendment was signed by the Minister of Finance of the Republic of Moldova, Veronica Sirețianu, and the Acting Chief of the United States Agency for International Development (USAID) Mission, John P. Riordan, on September 28, 2016.
The Amendment includes an additional non-repayable funding of $220 million to enhance Moldova’s energy security and reduce dependence on Russia by connecting key elements of the energy sector to European systems. The allocated amount will be utilized for implementing energy-related investments. Simultaneously, the Amendment establishes conditions for non-reimbursable budgetary support of $76.8 million, which will be provided by USAID through the Multidonor Trust Fund (MDTF) created by the World Bank. This budgetary support will ensure the reimbursement of electricity purchases from suppliers in Ukraine and ENTSO-E member countries for the period between September 2022 and March 2023.
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According to the Ministry of Public Finance, following the additional allocation, the total value of non-repayable aid from the U.S. government under the mentioned agreement will increase from approximately $172.73 million to $392.73 million, of which over $80 million has already been disbursed. To come into effect, the amendment requires ratification by the Moldovan parliament. The decision to initiate negotiations and sign the amendment was approved by the government in a session on May 17.
As previously reported by InfoMarket, to receive the mentioned new non-repayable financial assistance, the Moldovan government committed to adhere to the EU Energy Agenda and undertake any necessary actions for full integration into EU energy markets. To accomplish this, the government will take steps to harmonize the legal framework of the Republic of Moldova with EU legislation and provide supporting documents for each action undertaken. A separate agreement will be signed between the Moldovan government and the World Bank for the disbursement of the $76.8 million grant.
It is important to note that this funding does not increase the total U.S. assistance provided to Moldova under the Development Assistance Agreement between Moldova and the U.S. Government for sustainable economic growth based on European integration, signed on September 28, 2016. It has been agreed that the $76.8 million represents budgetary support/grant. In comparison, the $220 million, which will not be channeled through the national treasury system, will be allocated for the implementation of energy investment projects in Moldova.
It is worth mentioning that on December 30, 2022, the U.S. Government, through USAID, disbursed the first budgetary support/grant of $30 million to Moldova for the reimbursement of payments for electricity purchases from Ukrainian suppliers during the period from May to September 2022.