LocationsEnergy transformation - from infrastructure and new technologies to inclusion, well being and economic opportunities
September 2, 2025
Photo credit: UNDP Moldova
Since late 2021, Moldova has been navigating a series of overlapping crises, including the pandemic, sharp increases in energy prices, and the regional repercussions of the war in Ukraine. On the top of it, Moldova is one of the most greenhouse gas-intensive economies in Europe. From 2000 to 2020, GHG emissions rose by 53%, despite overall levels staying below the 1990 benchmark due to post-Soviet economic collapse. While energy intensity has declined, GHG emissions per unit of GDP remain among the highest in Central and Eastern Europe—highlighting the urgent need for coordinated, cross-sectoral action.
The country’s energy sector, historically characterized by deep dependencies and structural inefficiencies, struggled to cope with external shocks resulting in implications across multiple sectors and spheres of life. Dependency on a single source for more than 80% of its electricity has made Moldova extremely vulnerable. The war in Ukraine triggered an acute energy security crisis that exposed deeply rooted vulnerabilities across its national energy system, with implications for people’s cost of living and health of its social fabric. The war led to a dramatic surge in energy costs, with gas prices increasing sevenfold and electricity prices rising by 400%. By the winter of 2022, more than 70% of households were considered energy-vulnerable, spending over 10% of their income on energy, with growing risks of falling into monetary and food poverty.
In this context, the energy crisis exposed deep fissures within the country that spanned infrastructure issues (from the energy grid and mobility to connectivity), implications for economic competitiveness and growth, health and wellbeing of the population.
The portfolio approach provided a strategic framework for harnessing reform drive across different mandates and ministries (from Social Protection, Health, Education, Transport, Energy and Construction) to different sectors (from local schools and private sector to communities and people themselves). This allowed teams to design and deploy interconnected interventions that span energy infrastructure improvements, institutional capabilities, individual consumer behavior, socioeconomic vulnerability, and decarbonizing business operations .
On the energy side, action focused on improving resource efficiency of public buildings through investment in both energy efficiency and clean energy generation measures. In some regional hospitals, photovoltaic installations have cut energy use by 32%, avoiding 150 tons of CO2 emissions. This work is underpinned by investments in the Energy Management Information System (EMIS), which now covers over 5,000 public institutions. This helps manage the energy transition better but more importantly it provides strategic intelligence to the industry that can shape new investment decisions, the public sector to adopt more effective policy choices and citizens themselves improving decisions on a household level.
But perhaps even more critically, an Energy Vulnerability Reduction Fund (EVRF) was set up and designed to help households cope with energy price shocks. This has been done through direct compensation for heating and electricity costs, this intervention required a deeper sense of social need - including accounting for rural populations, single-parent households, and the needs of children and older persons. Given the critical state of energy vulnerability, the Ministry of Labor and Social Protection (leading on the EVRF) has been complementing the energy efficiency interventions led by the Ministry of Energy. In its first year, the EVRF supported 895,000 households, reducing energy poverty by 18% for locals and 7% for refugees, while monetary poverty dropped by 35% and 18%, respectively.
Elena Smîntînă, a mother of six from the village of Prepelița village, shared how the monthly support helped keep her family warm.
“Without these compensations, I don’t know how we would have managed. It would have definitely been harder.”
Her story echoes the experience of over 720,000 households who received similar aid during the 2024–2025 cold season, underscoring the tangible human impact of targeted energy support.
Both households and the private sector needed incentives and tools to reduce their energy intensity and greenhouse gas (GHG) emissions, as the pricing of electricity and heating were largely subsidized. That is why UNDP support focused on demonstrating the change and thus driving the business and market adjustments. The interventions under UNDP Moldova’s Just Energy Transition portfolio provided the essential support to companies to absorb the energy price shocks through investments in the energy efficiency solutions.
The UNDP's dual approach of working through the institutions of social protection and energy sectors to address vulnerabilities led to improved coordination, alignment of their respective support programmes and improved coherence and thus impact of their respective reforms on most vulnerable households.The mix of interventions included the ‘eco voucher programme’, aimed at most vulnerable populations, providing targeted assistance to replace outdated household appliances with modern, energy-efficient alternatives. Eco-vouchers helped individual households to implement energy efficiency measures that had the double effect of price shock absorption and energy savings, as well as provided incentives to change consumer behaviour towards reducing energy consumption.
"These vouchers help us a lot to renew old household appliances, which we cannot afford to replace financially. It would mean saving money for a longer time, which is not easy for a family with six children and a grandfather with a disability. We chose a refrigerator; the old one we had from our parents might not be as energy-efficient anymore. We first went to one of the stores indicated in the voucher to get informed in advance," said Mariana Mariț, a voucher beneficiary from Chișinău.
However, the complex set of issues in Moldova’s energy security can’t focus on subsidies alone. In parallel with the short-term measures providing much-needed immediate relief, actual transformation needs investment in options that take a longer time to mature but bring key pieces together in safe-to-fail exploration of more sustainable options. Moldova’s Energy Sandbox provided just that - a platform bringing private sector, research, and government actors together, experimenting with different approaches to address systemic failures in the energy ecosystem.
Aligning education curriculum with the intent of the just energy transition has been another long-term investment. Combined with campaigns and other behavioral nudges, this way Moldova hopes to bring citizens along the transformative process.
Finally, a new technology backbone was needed to underpin this work with real-time data and digital tools, further expanding the set of actors building new capabilities towards the shared mission. Along this route, digitalisation and cybersecurity has become a much more critical concern and required both immediate scanning (audits and priority integrated solution) and new policy and institutional mechanisms (including joint capacity building of a range of actors - from regulators to operators). Digitalisation of the energy services provides a range of tools to the national government to work on the energy sector policies to promote energy efficiency based on the data that was previously not available; energy distribution companies can reduce electricity losses based on the data, while consumers are empowered to make informed decisions to save energy.
The integrated approach is also cultivating a new generation of experts and connectors who understand how to bridge technical, social, and policy domains.
Moldova’s Just Energy Transition is a systemic shift. The portfolio model has proven its value by transforming fragmentation into collaboration, and crisis into opportunity. As Moldova moves forward on its path to EU accession and climate neutrality, this integrated, cross-sectoral approach offers a blueprint for lasting, inclusive progress.
The portfolio model also stimulated the enlargement of the UNDP’s intervention areas which bring decisions about how the energy is generated, produced and consumed closer to the people. It introduced concepts such as energy communities, real-time insights into energy consumption through the energy sector digitalisation, supporting the private sector with energy audits and adopting energy management international standards.
Originally published in UNDP 2025. UNDP Modernizing Development: Introducing Portfolios—a new systems-led way of working for today’s uncertain world, built for greater impact.
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