By Olga Rosca
The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are providing new finance to small and medium-sized enterprises (SMEs) in Moldova. A €17.5 million(US$20.84million) loan to Moldova Agroindbank (MAIB) will offer much-needed access to finance to this critical business segment.
The funds are part of the EU4Business-EBRD credit line and will help companies to invest in modern production equipment and technologies to meet EU standards in terms of product quality, health and safety measures and environmental preservation. Following these investments, companies will be able to offer high-quality products on the local market and benefit from trade opportunities with the European market.
The loan is the third provided to MAIB for on-lending to support businesses across the country and increase their competiveness. The joint EBRD-EU support comes at a critical time for firms in Moldova, which have been hit hard by the economic impact of the coronavirus pandemic.
The EU4Business-EBRD credit line is available in Moldova, Georgia and Ukraine. It has also been extended to Armenia, Azerbaijan and Belarus to make companies more competitive, following its previous success in the other three countries.
The EBRD aims to provide more than €400 million in loans to businesses through financial institutions participating in this programme, while the EU is making available €98 million in grants. The latter will support technical assistance activities to identify, promote and verify the best available equipment and green technologies as well as provide incentive payments to SMEs following the successful implementation.
“We are committed to helping businesses to invest in modern production, especially in the currently challenging climate,” said EBRD Head of Moldova, Angela Sax. “There are clear benefits to such investments in the short and medium term. We work closely with our financial and institutional partners to provide tangible support that will result in increased trade through higher standards and boost economic recovery across the country.”
“Access to finance is an essential element for SMEs to be able to overcome the current crisis and make use of their growth potential after the pandemic. The EU has been providing support to the SME sector in the Republic of Moldova for many years. Currently we have approximately 20 bilateral and regional projects helping Moldovan entrepreneurs through the provision of grants, loans and business advisory services. The EU-funded projects also aim to improve the business climate and ensure a level playing field for SMEs,” added EU Ambassador to the Republic of Moldova Peter Michalko.
“Now that the business environment is facing difficulties caused by the ongoing pandemic and climate issues, MAIB keeps on backing entrepreneurs, confidently supporting their business plans. The new loan is further proof that the EBRD, the EU and MAIB are combining efforts to strengthen Moldovan SMEs so that they can improve their production quality and conquer the European market. The partnership with the EBRD and the EU’s support allow us to help Moldovan businesses under preferential conditions,” said MAIB CEO Serghei Cebotari.
The EBRD is one of the largest institutional investors in Moldova. To date, it has invested around €1.4 billion in more than 130 projects in the country to support private businesses, key infrastructure and to build a greener and more sustainable economy.
