European Union stepping up support to energy efficiency in the residential sector of the Republic of Moldova
The European Commission and the European Bank for Reconstruction and Development signed a statement of intention for establishing a programme to reduce the cost of energy efficiency renovations for residential buildings in the Republic of Moldova.
The European Union will contribute €9,5 million in grants in support of credit lines provided under the EBRD Green Economy Financing Facility in residential sector (Residential GEFF). This joint initiative aims to incentivise Moldovan apartment and home-owners in undertaking energy efficiency renovations to reduce their energy bills and strengthen Moldova’s long-term energy security. This joint programme complements the Government’s Moldova Residential Energy Efficiency Fund, specifically dedicated to vulnerable families.
The statement was signed today by the European Commissioner for Neighbourhood and Enlargement, Olivér Várhelyi, and the Head of the European Bank for Reconstruction and Development Office in Moldova, Catarina Bjorlin Hansen.
“With this transformative new programme, EU’s ambition is to help reduce significantly the cost of energy efficiency renovations of residential buildings in the Republic of Moldova. With EU’s €9.5 million grant contribution supporting EBRD’s credit lines, homeowners can look forward to significantly lower their energy bills in Moldova. This significant EU support complements the financing already provided in support of the energy efficiency renovation of public buildings and of the Government’s residential energy efficiency programme for the most vulnerable households”, said European Commissioner for Neighbourhood and Enlargement Olivér Várhelyi.
“We are looking forward to launching the Residential GEFF program jointly with the EU and other partners. Participating banks under the program will offer loans to households for investments in energy efficiency measures, such as insulation, heat pumps, solar panels etc. After successfully implementing these measures, borrowers will be eligible for cashback, funded by the European Union”, said the Head of the European Bank for Reconstruction and Development in Moldova, Catarina Bjorlin Hansen.
The European Union has already provided significant support in the sector of energy efficiency and energy resilience of the Republic of Moldova. During his official visit to the Republic of Moldova, Olivér Várhelyi, European Commissioner for Neighbourhood and Enlargement, accompanied by Energy Minister Victor Parlicov, visited a multi-storey block of flats in Chisinau, where with EU financial support via MREEF an Individual Thermal Point (ITP) was installed and the Soviet vertical system of distributing thermal energy was changed to a horizontal one with heat meters in each apartment. Thanks to these changes, the thermal agent is centrally heated and evenly distributed to all apartments for heating, allowing individual heat regulation and metering in each apartment. In addition, PTI provide domestic hot water preparation. The switch to the horizontal distribution system brings benefits such as energy savings, lower bills and reduced greenhouse gas emissions.
“After the modernization of the heating system, the administration of the block of flats has submitted the application for MREEF funding for thermal insulation. This will reduce tenants’ bills by up to 30%. The Republic of Moldova is more than twice as energy-intensive as the European Union, and half of all energy is consumed in buildings. Much of this is simply wasted due to the lack of energy efficiency measures. Through the Residential Energy Efficiency Fund we will invest in rational energy consumption and lower bills for our citizens”, said Energy Minister Victor Parlicov.
The horizontal distribution system can be applied in more than 80% of the country’s multi-storey blocks connected to the centralized heating system. Over 70% of multi-storey blocks in Chișinău have low energy performance. In blocks of flats in Chișinău and Bălți where a horizontal distribution system has been installed, tenants have registered average savings on their bills of up to 22% in Chisinau and over 40% in Bălți.
The EU is the largest provider of financial assistance to Moldova. Since 2021, EUR 2.2 billion has been mobilised for Moldova through, among others, macro-financial assistance, budget support, bilateral assistance through Annual Action Programmes (AAP), humanitarian aid, crisis response support, as well as projects with international financial institutions (IFIs) guaranteed by the EU. EUR 157.5 million are expected to be disbursed in 2024 for budget support (EUR 35 million) and macro-financial assistance (EUR 122.5 million).
Background information
About Residential Green Economy Financing Facility (GEFF): GEFF will be implemented by the European Bank for Reconstruction and Development Bank, through commercial banks in Moldova. GEFF will target residential sector and is aimed at promoting energy efficiency investments.
About Moldova Residential Energy Efficiency Fund (MREEF): MREEF will target owners of individual houses and condominium owners’ associations which will be able to receive grants for energy efficiency measures. The fund plans to provide grant funding of up to 70% of the total costs required for implementing energy efficiency measures and the utilisation of renewables in the residential sector, with the remainder to be covered by residents. For 2024, 25 tenant associations have already been selected through a competition, in which they have implemented the necessary energy efficiency measures in the managed buildings.
