The World Bank’s Board of Executive Directors approved today a financing of EUR 92 million to the Republic of Moldova for the Second District Heating Efficiency Improvement Project, which will fund investments aimed at improving the efficiency of district heating services in Chisinau.
The project will enable Termoelectrica, the district heating company in Chisinau, to provide more efficient services to the population through installation of new fuel-efficient cogeneration equipment and the reconstruction and modernization of existing heat and power generation facilities. Additionally, the project will finance demand-side energy efficiency and energy conservation investments in selected public and residential buildings.
Moldova remains highly dependent on imports to meet its energy demand, and the inefficient energy use results in higher energy costs for industries and commercial, public and residential sectors, thus posing a serious bottleneck to growth and competitiveness.
Moreover, the heat and electricity generation infrastructure are obsolete and worn-out, which makes it less reliable and more costly to operate, with the main heat and electricity cogeneration units reaching the end of their operational life. The Project investments will help maintain the reliability of heat supply in Chisinau while significantly improving the district heating system efficiency, leading to a major reduction of CO2 emissions.
Since its creation in June 2015, as a result of a successful district heating sector reform backed by the World Bank District Heating Efficiency Improvement Project and associated technical assistance supported by the Government of Sweden, Termoelectrica made significant strides in rationalizing its internal organization and improving its operational efficiency and financial performance. The company has also improved the quality and reliability of district heating services and reversed the erosion of its customer base by becoming a provider of choice and discouraging the disconnections from the system.
“The Word Bank welcomes the launch of this crucially important project that will help the Moldovan authorities and Termoelectrica to consolidate the success of district heating reform and further strengthen the company’s operational and financial efficiency, thus making heat energy more affordable, especially for vulnerable and low-income consumers,” said Anna Akhalkatsi, World Bank Country Manager for Moldova. “The Project will further position Termoelectrica as electricity producer in efficient cogeneration mode, therefore increasing its competitiveness in a rapidly changing regional environment to provide natural gas and electricity. The Project is an integral part of the World Bank’s broader effort to help Moldova enhance the security of energy supply and improve affordability of energy services.”
The Project will benefit the population of Chisinau and other district heating consumers-at-large through an increased efficiency of the sector and increased reliability of district heating services from generation to end-user consumption, bringing these services closer to their consumers and contributing to improved energy efficiency behavior.
Since Moldova joined the World Bank in 1992, over $1 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 $528.6 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 COVID-19 emergency response, agriculture, and energy.