Italy contributes €10 million to enhancing energy resilience in Moldova

November 21, 2023

Through an agreement with the United Nations Development Programme (UNDP), Italy is contributing €10 million for compensating in the current winter the energy expenses of most vulnerable households and for supporting households and public institutions to improve their energy efficiency. 

Italy’s contribution will enable authorities to cover on-bill compensations in the upcoming winter period for energy-vulnerable households.

With Italian funding, smart meters will be installed in households facing issues with high consumption and energy poverty. This action will contribute to a more rational use of electricity, especially during peak hours. The data collected will be used to develop new consumption efficiency policies. With smart grids, customers will have more offers to choose from, being able to opt for flexible tariffs. Thus, consumers will be able to use household appliances during the hours when energy is cheaper.

“Overall, within the framework of the Moldova Support Platform, Italy is contributing €20 million to the resilience of the Moldovan energy sector. I am particularly glad that one component of this agreement with UNDP will be dedicated to the installation of smart electricity meters. These devices will be of great help to Moldovan families, particularly to the most vulnerable. They will contribute to making the Moldovan distribution network more efficient, safer and able to handle electricity produced from renewable sources. More efficiency means less vulnerability,” noted Lorenzo Tomassoni, Italian Ambassador to Moldova.

"With the support of Italy, we will continue the programme to digitalize the energy sector by expanding the number of new generation meters that allow remote data collection in real time, which for us is the first step towards differentiated energy tariffs. Also thanks to Italy, we will be able to increase the number of public buildings benefiting from investments in energy efficiency measures so that the money saved can be redirected to other purposes. We pay about three times more for energy, not because we have high tariffs, but because we have not invested in energy efficiency," said Victor Parlicov, Minister of Energy of the Republic of Moldova.

With Italian and UNDP support, several critical public buildings, including hospitals, will install photovoltaic panels. So, the institutions would significantly lower their energy bills, which could make available more resources for improving essential services provided to the population.

Homeowners’ associations will be supported to implement energy-efficient retrofitting measures in their residential buildings: buildings envelope insulation, windows replacement, facades thermal insulation, basement floor insulation, installation of rooftop photovoltaic panels, modernisation of the heating distribution systems etc. 

“We welcome Italy’s contribution which serves a dual purpose. It will contribute to the Energy Vulnerability Reduction Fund that provides on-bill compensations to most energy vulnerable population. At the same time, the Italy-UNDP partnership will also support implementation of energy efficiency measures and, in particular, smart-metering technologies towards just energy transition,” said Daniela Gasparikova, UNDP Resident Representative to the Republic of Moldova.

“The compensation programme for energy costs is an innovative one—a new model through which the Government can be closer to households in the Republic of Moldova. I want to thank the Italian people and the UNDP Moldova team for supporting the citizens of the Republic of Moldova, as well as the team from the Ministry for their dedication and effort. Last but not least, I want to encourage each of you to use energy resources efficiently and rationally,” said Alexei Buzu, Minister of Labour and Social Protection of the Republic of Moldova.

In 2022, the Energy Vulnerability Reduction Fund was set up by the Government of the Republic of Moldova with support from the European Union, Slovakia and UNDP, so as to alleviate energy poverty, exacerbated by the compounding crises. 

In the 2022-2023 cold season, approx. 895,000 households benefited from on-bill compensations. According to a UNDP impact assessment, the compensations reduced the level of energy poverty by 43% and had the greatest impact on the most vulnerable families; 57% of natural gas bill costs and 59% of the costs of heating bills were compensated.

UNDP and the European Union, as well as other development partners, will continue to support in 2023-2024 the operationalization of the fund and conduct a wide outreach campaign. 

The Energy Vulnerability Reduction Fund is coupled with complementary and critical interventions supported by UNDP and its partners, including a large programme to replace old household appliances with energy-efficient ones.