Moldova Increases Transparency with World Bank Support

December 16, 2016

Chisinau, December 16, 2016 The World Bank Group’s Board of Directors today approved the US$45 million Second Development Policy Operation (DPO-2) for Moldova.

DPO-2 gives budgetary support to the Government to make business regulation more transparent and less burdensome, improve bank regulation and supervision and to spend public money more efficiently. The purpose is to encourage businesses to invest and create jobs, and also to focus public spending where it is most useful.

This operation follows First Development Policy Operation approved in March 2014. The current operation is a key component of the Moldova Country Partnership Strategy for 2014-2017 and supports the Government of Moldova’s National Development Strategy “Moldova 2020”.

The approval of the second development policy operation today, has followed actions taken by the National Bank of Moldova and the Government to restrict fraud in the banking sector. As agreed policy measures for DPO-2, the World Bank supported the withdrawal of the licenses of Banca de Economii, Banca Sociala and Unibank, diagnostic audits of other large banks, and measures to strengthen bank regulation and supervision. The World Bank has worked closely with the IMF on recommendations to improve governance in the financial sector.

“The approval of this financing is an acknowledgement of Moldova’s recent achievements, especially in the banking sector and the affirmation of macroeconomic stability”, said Alex Kremer, World Bank Country Manager for Moldova. "Our budget support is about removing private interests from public economic institutions, because that is what businesses need to create jobs for ordinary Moldovans.”

The Second Development Policy Operation supports a number of important structural reforms improving financial sector stability, promoting transparency and refining the management of public investments, through making investment subsidies in agriculture more efficient and equitable, and improving coverage of well-targeted social assistance programs.

“This financing is an important benchmark for the Moldovan Government and we are looking forward to continue our cooperation in advancing structural reforms and addressing issues which constrain growth and job-creation”, said Ruslan Piontkivsky, Task Team Leader of the DPO series. “It is vital to use the momentum and move fast and firm in implementation of crucial reforms.”

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 9 active projects with a total commitment of US$356.15 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$56.3 million (US$53.4 million outstanding). Its committed portfolio consists of 78 percent loans and 22 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.

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