Washington, July 7, 2016 — Today, the World Bank’s Board of Executive Directors approved a US$10 million IDA credit to the Republic of Moldova for the Moldova Agriculture Competitiveness Project 2nd Additional Financing Project, which will contribute to enhancing the competitiveness of the agro-food sector by supporting the modernization of the food safety management system, facilitating market access for farmers, and mainstreaming agro-environmental and sustainable land management practices.
The lessons from Moldova's development pattern over the past decade, and its more recent manifestations of vulnerability, have emphasized the critical need for a new engine of growth – the revival of exports. The Government of Moldova recognizes the need for an investment- and export- led engine for growth based on increased capital investments, innovation and competitiveness in its National Development Strategy “Moldova 2020”. The strategy reinforces the Government's commitment to develop a dynamic economic model driven by domestic and foreign investment and export-oriented sectors.
“The World Bank is helping farmers to modernize because a lot of Moldovans depend on farming for jobs and foreign currency,” said Alexander Kremer, World Bank Country Manager for Moldova. “This project will help ordinary people in the countryside get jobs, even in difficult economic times.”
Moldova has an undisputed agricultural potential, and numerous sector assessments explain the high agronomic potential based on favorable geographic characteristics: rich soils, mild climate, topography, and agricultural tradition. The market potential inherent as a result of Moldova’s immediate proximity to the European Union, one of the largest and best performing food markets in the world, together with the recently signed Deep and Comprehensive Free Trade Agreement that has brought new and exciting opportunities for market diversification of the country's agro-food exports.
The new Moldova Agriculture Competitiveness Project 2nd Additional Financing complements and builds upon the results of two earlier projects – the Moldova Agriculture Competitiveness Project and the Moldova Agriculture Competitiveness Project Additional Financing component.
“The implementation of the original Moldova Agriculture Competitiveness Project provided an excellent platform for better understanding of inter-dependencies between capital-intensive modern agricultural production technologies and increasingly demanding agro-food marketing chains. This has led to a request from the Government of Moldova to scale up the project's market access activities via this additional financing,” said Anatol Gobjila, the Task Team Leader of the project. “This project will help Moldova’s agriculture and food production sector modernize and integrate into the international markets,” Gobjila said.
Since Moldova joined the World Bank Group in 1992, over US$1 billion has been allocated to approximately 60 projects in the country. Currently, the World Bank portfolio includes 10 active projects with a total commitment of US$355.5 million. Areas of support include regulatory reform and business development, education, social assistance, e-governance, healthcare, agriculture, local roads, environment, and more.
The International Finance Corporation’s committed portfolio in Moldova is US$63.6 million (US$60.2 million outstanding). Portfolio composition is 83 percent loans and 17 percent equity and quasi-equity. The Multilateral Investment Guarantee Agency has provided guarantees totaling US$95 million. Both institutions are members of the World Bank Group.