The World Bank's Board of Executive Directors approved the Growth and Resilience Development Policy Operation (DPO) for the Republic of Moldova. This initiative aims to support the Moldovan government's efforts to assist refugees and households affected by Russia’s invasion of Ukraine, while maintaining progress on economic integration with the European Union (EU) and enhancing climate resilience.
The $40 million budget support operation builds on previous initiatives such as the Moldova Emergency Response, Resilience, and Competitiveness DPO series. It aligns with the new World Bank Country Partnership Framework for Moldova and is part of a broader effort to help the government address energy and refugee crises while building resilience against future shocks.
Moldova's economy and public finances are under strain due to these crises, resulting in reduced household incomes and high risks that affect private spending and investment confidence. Following a recession in 2022 and a slow recovery in 2023, modest economic rebound and growth in household income are anticipated for 2024. The DPO aims to support short-term objectives by continuing assistance to vulnerable groups through programs like 'Ajutor Social,' which supports refugees and women's participation in the labor market, as well as helping families cover rising energy costs.
“Moldova is grappling with unprecedented challenges due to external shocks. The DPO will address immediate needs, such as sustaining support for the most vulnerable to mitigate the impact of multiple crises, while also contributing to the broader objective of fostering a more competitive, resilient, and private sector-led economy,” said Inguna Dobraja, World Bank Country Manager for Moldova.
Additionally, the DPO supports long-term goals aimed at creating a more competitive economy driven by the private sector. It includes measures to strengthen regulatory frameworks for competition and state aid, improve governance in the energy sector, reinforce banking deposit guarantees, promote energy efficiency, renewable energy sources, sustainable forest management for carbon sequestration, and agricultural land resilience.
This operation is part of a larger financial assistance package that includes contributions from entities such as the International Monetary Fund (IMF), EU, Global Affairs Canada, Japan International Cooperation Agency (JICA), Global Concessional Financing Facility (GCFF), among others. Specifically related grants include $10.5 million from M-GROW program funds and an additional $5 million from GCFF.
Since joining the World Bank in 1992, Moldova has received over $2.1 billion allocated across more than 70 operations. Currently active projects total $849 million across various sectors including regulatory reform business development modernization of government services tax administration land registration education roads health social sectors COVID-19 emergency response agriculture water sanitation energy