The European Bank for Reconstruction and Development (EBRD) will provide Moldova with $50 million to finance alternative purchase of natural gas from NJSC Naftogaz Ukrainy during a month if transit of Russian gas through Ukraine is stopped.
The relevant agreement was signed in Chisinau on Dec 11 by Moldovan Prime Minister Ion Chicu and the EBRD’s Managing Director in Eastern Europe and the Caucasus Matteo Patrone.
The Moldovan government has been working on backup scenarios the whole time and has now signed an agreement that will provide Moldova with gas as a backup, Chicu said, stressing that this is a backup plan that will only be used if gas transit through Ukraine stops.
This loan of $50 million will be used only if Moldova has to find an alternative way to import gas and operator Moldova Gas does not have sufficient funds for this, Chicu said.
This is a very important step and Moldova is confident that its cooperation with the EBRD and other external partners on energy security is particularly important and will continue, he said.
He added that the Moldovan government is counting on Russia and Ukraine reaching an agreement, which will enable Moldova to import gas along the traditional route after Jan. 1, 2020 more cheaply than in the previous period.
The first alternative option is to import Russian gas in reverse along the Trans-Balkan Pipeline, but if there are technical difficulties the authorities will resort to the second alternative option, which is to buy gas with the funds provided by the EBRD, Chicu said.
He expressed satisfaction that the negotiations with the EBRD were quick and fruitful. The start of talks was approved at a government meeting last week and an agreement was signed a week later.
Patrone said that the agreed financing facility is another demonstration of what the EBRD can do for Moldova, including with the aim of increasing the country’s energy security.
At the end of September, former Prime Minister Maia Sandu discussed creating gas reserves in storage facilities in Ukraine. President Igor Dodon said at the time that Russian gas giant Gazprom and Moldova Gas had already concluded preliminary agreements on gas supplies to Moldova. He also said that the country should not buy gas and store, as this would be inefficient and require loans.
However, last week, after the situation was discussed at a meeting of the Supreme Security Council, the government passed a resolution to start negotiations with the EBRD for a $90 million loan to buy gas in case transit of Russian gas through Ukraine is halted.
