ECONOMY FINANCE&BANKING

Romania loans Rep. Moldova EUR 50 million instalment a month earlier than initial date

Romania will loan the Republic of Moldova, a month earlier, the second instalment worth EUR 50 million of the loan ratified in 2016, worth EUR 150 million. The first instalment EUR 60 million was granted on 24 August 2016, informs the Ministry of Public Finance (MFP).

The loan is carried out on the basis of the “Agreement on the repayable funding assistance between Romania and Republic of Moldova” ratified under the Law no. 91/2016.

“In January 2017, the Ministry of Finance of Rep. Moldova sent through the Ministry of Public Finances of Romania an official letter through which requests amending the date on issuing the second instalment of EUR 50 million from 31 March 2016 to 27 February 2017”, the press release of MFP shows.

According to the Draft of the Government Decision on approving the date’s amendment, published on the website of the Ministry of Finances, the entry into force of the funding facility granted by the International Monetary Fund over a period of three years, by two credit instruments – Extended Fund Facility (EFF) and Extended Credit Facility (ECF) of USD 178.7 million total value was communicated.

“The entry into force of the IMF facility represents a necessary condition for issuing no. 2 instalment on the repayable funding assistance granted by Romania”, the document shows.

By the Law no. 91/6 May 2016, the Agreement on the repayable funding assistance between Romania, as the lender, and Republic of Moldova, as the borrower, an amount up to EUR 150 million, signed in Chisinau on 7 October 2015, was amended through the exchange of letters between the Prime-Ministers of Romania and the Rep. Moldova on 30 January 2016, respectively on 5 February 2016.

“The exchange of letters established a series of obligations on behalf of Rep. Moldova on issuing the first instalment, like establishing a Roadmap for reaching an agreement with the IMF, initiating a legislative package for improving the business environment, launching a systemic analysis of the vulnerabilities in the banking system and setting a legislative calendar on correcting them, with an emphasis on consolidating the regulation’s prerogatives of the National Bank, presenting an updated and application plan for the Strategy for Justice Sector Reform and National Anticorruption Strategy, and close consultation and cooperation with the representatives of civil society in the Rep. Moldova for solving the mentioned aspects”, the explanatory memorandum specifies.

On 24 August 2016, the first loan instalment provided in the Agreement, amounting EUR 60 million, was granted, (…) the registered progresses by Rep. Moldova in signing a funding program with the IMF for a three-year period being confirmed, through a staff level agreement and the adopted measures for improving the business environment and Reform Strategy on the Strategy for Justice Sector Reform and National Anticorruption Strategy were communicated.

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