Ministry of Economy

Sergiu CIOBANU,Deputy Minister of Economy

May 25 – 26, 2012

Medium Term Priorities of Ministry of EconomyEnsure sustainable economic growth;Increase competitiveness of national economy;Address the administrative constraints for

businesses;Ensure SME development and facilitate access

to funds;Promote exports and investments;Develop quality infrastructure and ensure

consumer protection; Ensure energy security and promote energy

efficiency in all the sectors of the economy.

Foreign Aid Coordination PlatformPurpose

Improve efficiency, effectiveness and sustainability of foreign aid;

Improve communication among stakeholders; Engage all stakeholders in planning and

implementing foreign assistance.

Foreign Aid Monitoring and Coordination in Ministry of Economy

Assistance in 2010-2012In 2010-2012 the foreign assistance in the sectors of the

Ministry of Economy amounted to about 240 mil. Euros;

Type of assistance: - Budget support; - Technical assistance; - Financial assistance.37 projects funded by 11 development parteners were

implemented Key beneficiary sectors: - Development of entrepreneurship and investments; - Commercial policies; - Quality infrastructure and consumer protection; - Energy security and efficiency.

Breakdown of Assistance by Donors

Breakdown of Assistance by Sectors

Development of Entrepreneurship and Investments

Strategic Objective:Enhance economic stability of Moldova through improved capacities for development of small and medium enterprises

Number of projects– 15Global budget– 83 000 000 eurosKey donors – EU, USA, Government

of Japan, Government of Norway

Projects implemented in 2010 - 2012Project Donor Total

Amount (Euro)

Outcomes

Competitiveness enhancement and enterprise development II (CEED)(2010 2014)

USA 5 343 511 - Increased sales in relevant sectors- Increased investments in relevant sectors.

Technical assistance to Public Procurement Agency in Moldova (2007-2010)

GERMANY 320 000 Increased efficiency of Public Procurement Agency in Moldova

Sector Budget Support Program „Economic Stimulation in Rural Areas” (2010-2014)

EU 42 000 000 Balanced economic growth in Moldova with emphasis on the rural areas through efficient national and sector economic policies and coordination, transparency and financing mechanisms.

Technical assistance for the implementation of Budget Support Program on Economic Stimulation in Rural Areas (2011-2014)

EU 3 000 000 Improved performance of beneficiary entities (ME, MF, MAFI, MTRD) in their efforts to implement the key components of the actions included in the Matrix for Sector Budget Support Program on Economic Stimulation in Rural Areas.

Practical tools to support the small and medium enterprise sector in Moldova, cluster development (2010)

CEH 61 594 - Organization of two study trips in the Czech Republic - Organization of a trip of the Czech experts to Chisinau, Moldova.- Development of a concept of SME integration in clusters in Moldova.

Support for use of remittances to start new businesses and create jobs (Contribution from Czech Republic) (2011-2014)

CEH

EU

125 600

500 000

900 migrants or recipients of remittances received training in enterprise management and starting new business150 repatriated individuals and/or recipients of remittances received assistance in starting their own businesses and post-creation support

Project Donor Total Amount (Euro)

Outcomes

Efforts to promote structural economic adjustments (JNPGA) (2005-2012)

JAPAN 14 782 609

Procurement and import of equipment by leasing at zero interest rate for one year (no pledge). Payment of 60% of the cost of equipment in 4 tranches. 40% of the cost is covered from grant funds.

ENTRANSE 2 your business (2006-2011)

NORWAY 1 000 000 - Business incubator in Soroca - established and operational;- SME portal designed and deployed – works as an interactive information center for businesses.

Promotion of development policies for small and medium enterprises in Moldova (2010-2013)

HOLLAND 606 100

- development of a relevant and well-structured package of policies in SME sector.- development of the institutional framework in SME sector and introduction of a SME policy consultation, implementation and monitoring mechanism.

Development of public-private partnership (2007-2010)

UN 1 282 733

Development of infrastructure and public service in the poor rural and urban areas.

Program for attracting remittances in the economy (PARE 1+1) (2010-2012)

UN 50 000

- Delivery of entrepreneurship training and provision of free of charge assistance for start-ups.- Provision of funding for viable businesses through grants that will cover 50% of investments, but less than 200 thousand lei.- Support and reintegration of returned migrant workers through advice on the employment opportunities and funding available for start-up programs;- investment of remittances in the development of economy

The Business Regulatory and Tax Administration Reform Project (USAID|BIZTAR) (2007-2011)

USA 6 521 739

- Reduced administrative burden on the private sector- Improved fiscal system- Less opportunities for corruption- Improved access of individuals and businesses to government data- Improved public-private dialogue.

Project Donor Euro Outcomes

Support to Export Promotion and Investment Attraction in Moldova (SEPIA) (2008-2010)

EU 1 600 000 - Support for Ministry of Economy and its entities in coordination and improvement of the export promotion and investment attraction system; - Support for Ministry of Agriculture and Food Industry in improving its lab system; - Support for Moldovan businesses in accessing funds for export development; - Promotion of exports; – Promotion of investments.

Competitiveness enhancement and enterprise development (CEED) (2005-2010)

USA 6 073 714 Development of the industrial sectors of the Moldovan economy, such as the wine, textile/clothing, ICT industries.

Support and development program for small and medium enterprise sector, funded by the Government of Japan (2005-2012)Objective: Create conducive environment for small and medium businesses to develop

production in the Moldovan rayons.

 

Funding scheme: the first two tranches , 5% and 20%, accordingly, of the equipment price, before

shifting to leasing scheme; tranches III and IV, 15% and 20%, accordingly, of the equipment price, during one

year from receipt of equipment in case of grant component in the amount of 40% of the equipment price;

tranche V amounting to 40% to be paid after 18 months from the receipt of the equipment only if there is no grant component under the leasing contract provisions.

Outcomes: 138 beneficiaries

175 leasing contracts

Price of equipment 205,3 mil. lei.

ENTRANSE 2 Your Business Project (2006-2014)

Funded by Government of NorwayTotal budget - 1.215 mil. USDObjective: Support economic growth, increase

employment and reduce poverty through support for SME sector development in Moldova through: creation of pilot business incubators in Soroca, support to other business incubators and their institutional development, enhancement of institutions, associations and business incubator networks, facilitation of access of SME to information by putting in place the Informative Portal for SME.

17 residen

t compan

ies

17 residen

t compan

ies

119

jobs created

119

jobs created

3 years

– incubation

period

3 years

– incubation

period

50% start-ups

50% start-ups

Commercial Policies, Quality Infrastructure and Consumer

ProtectionStrategic Objectives:

Negotiate and implement the Deep and Comprehensive Free Trade Agreement between Moldova and the EU;

Strengthen the National Accreditation System;Develop the National Standardization System;Adopt and promote the European metrology

standards;Ensure protection of consumers;Develop the market supervision capacities.

Commercial Policies, Quality Infrastructure and Consumer

Protection

Number of projects – 3Global budget – 32 400 000 eurosKey donors –EU, World Bank

Projects implemented in 2010 - 2012Project Donor Euros Outcomes

Competitiveness improvement (2004-2012)

WB 30 396 825

The B component of the project aims at upgrading the National Metrology, Standardization, Testing and Compliance Assessment Systems (MSTQ).- Compatible EU standards adopted– 1700- Testing organizations available for enterprises – 100- Number of calibration services delivered to businesses by NISM - 750

Twining. Support to Main State Tax Inspectorate for market surveillance, metrology and consumer protection (2012-2013)

EU 1 000 000

Support to Consumer Protection Agency.

Twinning. Support to the Accreditation Center for Compliance Assessment (2012)

EU 1 040 000

Support to the Accreditation Center for Products Compliance Assessment for the signing of Multilateral Recognition Agreement with the European Cooperation for Accreditation.

Competitiveness Improvement Project2006-2012 Assistance provided by:

International Development Association: Credit 33,8 mln USA; Government of Japan: grant 4,9 mln USD.

Project components: Improvement of business environment; Upgrade of MSTQ system (ISO co-funding grant scheme); Facilitation of access of businesses to MSTQ services (ISO co-

funding grant scheme)- 1,2 mln USD; Facilitation of access to funds;

Credit Line for exporters - 22,5 mln USD;

Expansion of the co-funding grant scheme in order to improve competitiveness of businesses – 1,5 mln. USD

Competitiveness Improvement Project- outcomesImprovement of business environment(component A)

Upgrade of MSTC system(component B)

Facilitation of access of businesses to MSTC services(component C)

Facilitation of access to funding(component F)

•Inspections per year for each company <12•Number of civil servants and experts trained in RIA - 1000

•Adapted compatible EU standards – 1700• Available testing organizations– 100•Number of calibration services delivered by NISM to businesses - 750

• Subsidies paid for International Quality Certificates - 190• Subsidies for business development - 200

• Approved sub-loans - 120• Share of nonperforming loans <5%

Energy Security and EfficiencyStrategic Objectives:Promote energy efficiency in all the sectors of the economy and

use of renewable energy sources,Build the energy connections with Ukraine and Romania; Integrate the national energy system in the European energy

system;Diversify the country’s energy supply sources; Improve use of energy and fuels in their production, transport,

distribution and supply;Settle the debts and stabilize the financial situation of

enterprises operating in the energy sector;Bring in private investments in the rehabilitation and

construction of energy enterprises.

Energy Security and Efficiency

Number of projects – 12Global budget– 160 700 000 euroKey donors –EU, World Bank, EBRD

1

Implementation of National Energy Efficiency Program by 2020;Ensure smooth operation of Energy Efficiency Agency; Creation of the Energy Efficiency Fund;Financing of energy efficiency projects and use of renewable energy sources.

Interconnection of the national energy system to the European network of transmission system operators for electricity ENTSO-E;

Diversification of primary energy sources;

Investments in energy infrastructure projects (LEA 400 kV Balti-Suceava, LEA 330 kV Balti- Novodnestrovsc, Ungheni-Iasi interconnection gas pipeline).

Key pillars of Energy Sector

Building the capacities of authorities for regulation, policy development and implementation;Aligning the legal framework to EU standards;Economic, institutional and technical re-engineering of the thermo-energy sector;Encouraging private investments in energy infrastructure based on PPP mechanism

Security

Sustainability

Efficiency

Projects implemented in 2010 - 2012Project Donor Total amount Outcomes

Budget Support Program in energy sector reforms (2011-2014)

EU 40 mil. Euro Energy Strategy of Moldova till 2030 to be made public officially on 11.06.2012Creation of Energy Efficiency Fund under way.Moldovan legislation being aligned with the EU Directives and standards in energy sectorNational Program for Energy Efficiency approved in November 2011.

Development of the feasibility study for interconnection of energy systems of Moldova and Ukraine with ENTSO-E (indicative June 2012-2015)

EU 7,067 mil. Euro Final European Commission approval for funding a feasibility study on interconnection of the national energy system to the European one ENTSO -E

Construction of Ungheni – Iasi gas pipeline (indicative June 2012-2015)

EU 20 mil. Euro Feasibility and environmental impact study conducted for construction of gas pipeline.Construction expected to end in 2013.

Financing Line for Energy Efficiency in (MoSEFF) (period – 2009 -….)

BERD 20 mil. Euro EUR 25 mln. agreement signed for MOREFF program – residential sector

Energy and Biomass project (period – 2011-2014) EU and UNDP 14 mil. Euro EU; 0,56 mil. Euro UNDP

35 biomass heating projects implemented in 7 rayons and TAU Gagauzia.Technical assistance for project beneficiaries. Leasing mechanism for biomass processing equipment developed

Technical assistance for the implementation of the Budget Support Program in energy sector reforms (period – indicative September 2012-2015)

EU 2,6 mil. Euro To be launched in June 2012

Energy SectorProject Donor Total Amount Outcomes

Regional Program „SYNENERGY” (period 2008 - Greece – 50%, USAID – 50%

8 mil. Euro Law on the heating is at its final stage of development.MARCAL Program was officially launched to make energy forecasts.

Capacity building for sustainable energy management (period - 2012-2015)

SIDA 1,6 mil. Euro Energy Strategy of Moldova till 2030 made public on 11.06.2012Institutional capacity-building for ME and ME and EEA

Energy Performance of Buildings Directive Transposition/Law on EPB

EBRD  - Draft Law on energy performance of buildings developed and submitted for comments

Revision of feed-in tariff methodology EBRD  - 3 surveys on ESR support mechanisms were developed and made public on April 11, 2012

Modernization of local public services in Moldova (MLPS)

GIZ, co-funding from SIDA

2,1 mil Euro (including for Energy Efficiency of Public Buildings component)

Rayonal hospital in Orhei town was upgraded in terms of energy efficiency under the energy component of the project.

Energy II World Bank, Sweden

44,8 mil. Euro - Improvement of supply and cosumption of heat in the selected public buildings- Improvement of security and reliability of the energy transmission system and wholesale energy supply and, therefore, facilitation of the free industrial operation of the energy system at national and international levels.- Rehabilitation and development of the Central Station and Telecommunications for energy system

Energy and Biomass Project – Success Stories...

•Energy and Biomass project – implemented in 16 rayons and Gagauzia •Projects approved for 58 communities, including 72 schools, kindergartens, community centers, etc. •Capacity of biomass heating systems is about 15 MW•Implementation of the approved projects will benefit 43643 individuals, including 13135 children

Briquette boiler from Community Center in Carbalia village, TAU Gagauz-Yeri. Beneficiaries: 555 individuals

Bale boiler in the lyceum in village of Olanesti, Stefan Voda rayon. Beneficiaries: 600 individuals

Energy and Biomass Project – Success Stories...

• 1543 LPA representatives and local leaders, 76 suppliers of biomass fuel and 176 operators acquired new skills and knowledge in modern biomass production and use technologies for energy purposes

• About 1 million individuals covered by actions and events meant to promote biomass energy (public events, media campaigns, discussion clubs, onsite trips, video and audio spots, outreach materials etc.)

• The first edition of MOLDOVA ECO-ENERGETICĂ - annual event to grant awards in renewable energy and energy efficiency sector - successfully held

Thank you for your attention!