EBRD lends Moldova €102.9 million to rehabilitate irrigation systems

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EBRD lends Moldova for irrigation

Highlights

EBRD lends €102.9 million to Moldova to rehabilitate and modernise centralised irrigation systems, aiming to boost agricultural resilience and competitiveness.
€49.8 million targets Nistru River basin systems, restoring irrigation on 6,900 hectares, with a total project package including €4.8 million EU grant and €7.2 million national contribution.
Upgrades are expected to save 13 million cubic metres of water annually and enable a threefold increase in agricultural output in rehabilitated areas.

Financing plan for priority irrigation upgrades

As announced by the EBRD, the lender is providing €102.9 million to the Moldovan government to rehabilitate and modernise priority centralised irrigation systems, in a move intended to strengthen the country’s agricultural resilience and competitiveness.

Up to €49.8 million of the loan is allocated to the Puhacenii de Sus and Masivul Causeni systems in the Nistru River basin, including the procurement and installation of modern water-intake, pumping and distribution infrastructure. That investment is set to restore reliable irrigation services to about 6,900 hectares of farmland where infrastructure is obsolete, non-functional or underused.

The package is complemented by a €4.8 million investment grant from the EU Neighbourhood Investment Platform and a national contribution of up to €7.2 million under the EU Growth Plan for Moldova. The remaining €53.1 million of the EBRD loan is to finance additional priority centralised irrigation systems that the government has yet to identify.

Efficiency gains and agricultural impact

Modernised systems including pressurised pipe networks, appropriately sized pumping equipment, variable-speed drives and automated controls are expected to improve the energy efficiency of water distribution. The upgrades are also projected to save around 13 million cubic metres of water a year and support a threefold increase in annual agricultural output in the rehabilitated areas.

The project also aims to strengthen Moldova’s National Agency for Land Improvement as the implementation unit and help water users’ associations and farmers manage the systems on a sustainable basis. Technical assistance is set to cover asset management, financial planning, service-fee setting and digital reporting, alongside measures to increase the participation of women and young farmers in irrigation governance and training.

The EBRD remains Moldova’s largest institutional investor. Since the start of Russia’s full-scale invasion of neighbouring Ukraine, the bank has provided €1.7 billion to Moldova to help mitigate the war’s economic effects, and its total investment in the country exceeds €3.1 billion across 201 projects.

Our earlier coverage of the G24’s warning on rising debt-service costs highlighted how heavier debt burdens and higher borrowing rates are tightening fiscal space for many developing countries. We noted that this squeeze is limiting resources for investment and job creation, prompting calls for expanded access to affordable concessional financing from international lenders.

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