WORLD BANK TO FURNISH $134.3 MILLION TO MOLDOVA WITHIN DPO2 OPERATION

The World Bank's Board of Executive Directors approved on Friday the Second Emergency Response, Resilience, and Competitiveness Development Policy Operation (DPO2) for the Republic of Moldova.

The WB wrote in its press release that this approved budget support, totaling $134.3 million, will support the Government of Moldova in mitigating the socio-economic impacts of Russia’s invasion of Ukraine, particularly on refugees and households. Additionally, it aims to bolster resilience and enhance competitiveness to reduce vulnerabilities to future shocks.

The World Bank pointed out that Moldova is currently grappling with unprecedented challenges arising from the spillover effects of the Russia’s invasion of Ukraine, significantly impacting households, the economy, and public finances.

“This emergency budget support that comes with contributions from our development partners will help the government of Moldova mitigate the ongoing impact of the Russia’s invasion of Ukraine on refugees and households severely affected by recent crises. I am also pleased that this operation will foster resilience and enhance competitiveness to reduce vulnerabilities to future shocks,” said Inguna Dobraja, World Bank Country Manager for Moldova.

This operation is part of a coordinated financial assistance package to Moldova from international partners in response to the current socio-economic emergency. The package includes contributions from the International Monetary Fund, the European Union, and bilateral partners. The DPO2 comprises an IBRD loan of $100 million and benefits from a co-financing grant of $9.3 million from the Moldova Development Policy Multi-Donor Trust Fund (MDTF), as well as a $25 million concessional contribution from the Global Concessional Financing Facility (GCFF).

To date, the development partners’ contributions to the Moldova Development Policy MDTF have been received from the United States, Norway, Ireland, and Sweden, with additional partner support expected in coming months, as well as parallel financing from the Japan International Cooperation Agency (JICA).

The first operation (DPO1) worth $159.24 million was approved by the World Bank in June 2022 to mitigate the impact of the war in Ukraine on refugees and households, to foster resilience and enhance competitiveness to reduce vulnerabilities to future shocks.

Since Moldova joined the World Bank in 1992, over $1.3 billion has been allocated to more than 60 operations in the country. Currently, the World Bank portfolio includes 11 active projects with a total commitment of $608 million.