WASHINGTON, May 31, 2023 - The World Bank's Board of Executive Directors approved today financing for the Moldova Agriculture Governance, Growth and Resilience Investment (AGGRI) Project in the amount of $55 million. The project will help the country to improve delivery of public agricultural services, foster market-oriented growth, increasing the economic resilience of targeted beneficiaries, and provide effective mechanisms of responding to emerging crises.
Moldova's proximity to and relationship with the European Union (EU), one of the world's largest and most successful food markets, offers significant potential for export-oriented growth. To take advantage of this opportunity, the sector needs to maintain alignment with the EU requirements while addressing existing sub-sector performance discrepancies to leverage comparative advantages for growth, market orientation, and climate resilience.
A proposed framework for achieving these objectives is to prioritize the production and supply of agricultural food and products that meet quality standards in target markets at competitive prices while remaining resilient and resource-efficient. This framework is centered on three essential pathways toward market-oriented and resilient agricultural growth: 1) emphasizing the overall quality of sector governance and its alignment with EU standards; 2) focusing on growth-oriented development of agricultural holding and processors, with additional support needed for EU-compliant modernization; and 3) centering on resilience and sustainability.
"The agricultural sector is vital for Moldova's economy and I'm glad that with the World Bank support, the country will improve delivery of public agricultural services, foster market-oriented growth and increase resilience of beneficiaries," said Inguna Dobraja, World Bank Country Manager for Moldova. "This project will also help Moldova respond promptly and effectively to eligible crises or emergencies, should such occur."
In addition to the above objectives, the AGGRI project will help improve essential systems for policy formulation and implementation, monitoring and evaluation of public spending. It will also digitalize core services and institutions, help improve knowledge management practices and strengthenlinkages between business service providers and farmers seeking EU compliance support.
The project will also support growth opportunities in value chains for dairy, meat, horticultural production of vegetables, and niche products. These sub-sectors offer significant potential for entrepreneurship and job creation in rural areas, particularly for women, and can help the country achieve its goals of environmental sustainability and reduced greenhouse gas emissions in agriculture, in a manner consistent with EU funding requirements for agricultural productive systems.
A core component of the AGGRI project is to help Moldova's agriculture sector cope with its susceptibility to drought by expanding the availability of irrigation services to interested farmers. This need arises not only from the transition to high-value agriculture, which requires water-intensive cultivation of fruits and vegetables, but also from the cultivation of field crops which are perpetually more vulnerable to a drier changing climate. Investments will be directed for the rehabilitation of irrigation systems managed by water users associations, to ensure technical functionality, greater adoption of services, more efficient water, and electricity usage, and facilitate a transition to more productive cropping patterns.
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 $617.2 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.
