Upon gaining independence in 1991, Moldova embarked on an ambitious program of reforms enjoying the support of international donors and financiers. However, Moldova still faces a deep economic crisis and is in transition to a market economy. Since 1995, the inflation rate has averaged 15% per year, while GDP growth has increased just 5% annually.
Energy Problems
The energy sector has been critically affected by the deepening recession and prolonged economic crisis. The country imports virtually 100% of its energy resources. The inefficient production, transportation, and consumption (end-use) and non-payment of bills has led to massive energy arrears, both current and historic. Despite the restructuring attempts back in 1997, when the energy sector had been unbundled into functional companies and the regulatory regime established, the highly politicized nature of the regulatory process and the government ambivalence for an independent regulatory regime slowed the recovery and efficient functioning of the sector.
Most of Moldova’s heating systems are dormant, of inadequate design or in poor condition. In 2000, the heat utilities were transferred to municipal administration but this did little to resolve the management, planning, consumption, billing, and system efficiency problems. Most enterprises have been disconnected from district heating sources as a result of ever-increasing debts. During the last two years only 4 of 42 municipalities' heat has been partially or fully supplied to consumers. In other municipalities, households and companies are looking for alternative heat sources, often times installing autonomous boilers that would not necessarily be energy efficient.
The Alliance’ s Response
The Alliance, with support from USAID, started its activity in Moldova in 2001 with an initiative to develop a regional network promoting energy efficiency at the municipal level. The Alliance’s goal was: (i) to design and implement innovative energy efficiency policies and identify barriers to their successful adoption; (ii) to build and strengthen the local capacity of regional and municipal stakeholders; (iii) to develop and attract financing for energy efficiency projects in Moldova; (iv) to bring useful energy management experiences from other countries; (v) to implement demonstration projects to prove small energy efficiency investments can reduce costs, improve comfort and offer other benefits.
For more information visit: www.munee.org or contact Astghine Pasoyan.
