Project Summary:

Because Moldova lacks energy resources, it is almost fully dependent on imports of fossil fuels and electricity. Since October 2021, gas prices have increased significantly in Moldova due to both the latest developments on the regional energy markets caused by the post-pandemic economy recovery and the war in Ukraine (the purchasing gas price increased from 265 USD/1000 m3 in 2021 to 1193 US/1000 m3 in April 2022 and 919 US/1000 m3 in May 2022). Unforeseen excessive price increase has caused a domino effect of rising prices in all areas, including electricity, increasing the level of energy poverty of the population. This have put significant pressures on the public finances and the most vulnerable citizens’ ability to afford gas over the winter (60% of Moldova’s population live in energy poverty, spending more than 10% of their budgets on energy bills). In addition, the war in Ukraine and the influx of refugees as a consequence, as well as the decrease in remittances from Ukraine and Russia has put more pressure on the Moldovan economy.

To enhance security of gas supply, Moldovan authorities are seeking to diversify gas supplies and create gas stocks for emergency situations or specific cases, by enabling acquisition, creation and use of gas stocks, especially if there are natural gas shortages.

The Programme is intended to enhance the Republic of Moldova’s energy security and resilience in the face of current and future shocks and prompt the energy transition.

The Programme assists the Government of Moldova to tackle the current energy crisis and energy poverty in addressing prioritized systemic elements in the energy sector to cope with potential future energy crisis. Its ambition is to enable energy markets to become functional, transparent, and ready to integrate in European regional markets, while citizens are benefiting from green energy transition in an inclusive way.

The Programme will assist Moldova to take actions against energy crisis through: (i) improving and consolidating its energy policy and legislative alignment in line with the country’s international and regional commitments, along with (ii) building capacity of the main energy players for prevention of major risks in the current and potential future energy crises. The Programme will foster public support for energy transition and energy efficiency through (iii) awareness raising, information and communication, while addressing disinformation in a gender sensitive manner, together with (iv) demonstration/pilots of energy efficiency and renewable measures to increase energy affordability and development of sustainable financing mechanisms with primary focus on vulnerable households and public sector.

Objectives:

Support the Government of Moldova to: 

• Put in place the legal and regulatory framework in the energy sector with mainstreamed social and climate considerations in line with the EU requirements;
• Strengthen the capacities of the energy-related actors and enhancing institutional coordination mechanisms to address and avert risks entailed in recent and potential future energy crisis;
• Increase awareness and communication among the population to adopt the best energy saving practices and measures and to encourage the use of renewables; 
• Operationalize nation-wide energy programmes and demonstrate solutions to increase energy affordability in residential and public buildings, targeting specifically the most vulnerable and affected groups of population.

Expected results:

• National policy framework and long-term planning in the energy sector improved and aligned to climate commitments;
• National regulatory framework (both primary and secondary) improved in line with Moldovan energy commitments, ensuring that national authorities are better prepared and can respond to emergency situations in the energy sector and to the needs of the most vulnerable energy users;
• Key energy players have increased expertise, technological, institutional and enforcement capacities to prevent major risks in current and potential future energy crises;
• National capacities to organize transparent and non-discriminatory procurement   procedures in the energy field are strengthened;
• Government capacities to monitor and provide targeted response to energy poverty is increased through institutionalization of a new mechanism;
• Facilitate citizen’s engagement in formulation of energy policies and contribute to increased transparency of decision-making process;
• Enhanced capacities of the Ministry of Energy and the National Agency for Energy Regulation of the Republic of Moldova to implement the mechanism for creating and maintaining natural gas mandatory stocks, at the lowest costs possible and with the minimum impact on final consumers
• Improved definition and measuring of “energy vulnerable consumer”;
• National nudging program for household successfully implemented to improve and reduce energy consumption;
• Advocate for renewables and practical solutions to alleviate energy poverty;
• Citizens’ empowerment to participate in decision making process in the field of energy, debunk myths and increase level of literacy in the field of energy sector;
• National Programs to adopt energy saving practices and technologies, including in vulnerable households are successfully launched and piloted;
• Adoption of energy efficiency measures in apartment buildings is enhanced;
• Domestic power generation from renewable energy sources for the needs of public buildings available;
• At least 50 thousand of energy vulnerable families will be able to reduce their energy bills due to the large-scale vouchers programme for householders (switch to more energy efficient home appliances) and the Green Home Programme (use of renewable solutions); 
• At least 5 multi-apartment buildings will undergo refurbishment of their distribution heating system leading towards saving of energy; 
• At least 3 medical institutions will reduce their expenses on energy after installation of photovoltaic systems.

Accomplishments:

• The Energy Vulnerability Fund was established and implemented, alongside the operationalization of the Energy Vulnerability Information System. Targeted information campaigns during the heating seasons of 2022-2023 and 2023-2024 significantly boosted beneficiary registration on the online platform, greatly expanding outreach;
• A comprehensive functional analysis of the National Centre for Sustainable Energy was carried out, leading to the development of updated regulations that provided vital support for the center's reform efforts;
• Support was provided for the establishment of the Ministry of Energy, along with the necessary equipment to ensure its effective functioning. Moreover, support for strategic communication was provided to the Ministry and the National Center for Sustainable Energy;
• Approx 50,000 to benefit from the Rabla for household appliances programme, replacing energy-inefficient light bulbs and/or home appliances;
• Refurbishment of heating systems in 4 multi-storey buildings (approx. 450 flats) resulted in considerable energy savings by converting from vertical to horizontal systems;
• 74 households providing parental services participated in the Green Home programme, leading to significant energy savings through thermal isolation, ceiling upgrades, replacement of doors and windows, or installation of biomass boilers and solar panels;
• Solar panels were installed on the roofs of 5 regional hospitals, with a total capacity of 600 kW, leading to economies of up to 30% of annual energy budget;
• Energy audits were conducted for 6 regional hospitals and 25 multi-storey buildings;
• The draft Integrated National Energy and Climate Plan, along with the respective Strategic Environmental Assessment, has been drafted and submitted to the Government;
• Legislative and regulatory acts have been developed, including amendments to the Natural Gas Law and contributions to amending the electricity law and Risk assessment and preparedness documents, covering national risks affecting natural gas and electricity supply, alongside prevention and emergency action plans;
• Support was provided for the preparation of the heating system for the 2022-2023 season during crisis situations. This encompassed inspecting and preparing 100 biomass heating systems in public institutions for the winter of 2022, alongside training 100 operators of biomass thermal power plants to enhance their operational efficiency and readiness;
• Various studies and methodologies were developed, aiming to enhance energy security focused at consumption distribution, solid fuel demand and supply, and biomass potential;
• A regular coordination mechanism was established for key stakeholders in the energy sector and a financing mechanisms matrix was developed for energy efficiency and renewable energy projects across key sectors of the national economy;
• Comprehensive capacity development programmes conducted, involving governmental bodies, private sector entities, and academic institutions on a range of relevant topics for the development of the energy sector including but not limited to energy labeling and ecological design, green procurement, ecological design, energy auditing, etc.
• A Guide on applying energy efficiency and renewable energy measures for the residential sector was developed;
• The project successfully engaged youth in promoting energy efficiency and renewable energy through thematic shows and a drawing competition, reaching over 2,300 children and raising awareness on sustainability;
• 40 journalists were trained on how to write about energy topics and 11 media outlets received grants to cover issues related to energy sector modernization policies and combatting energy myths.