May 26 (SeeNews) - The World Bank said that it approved a $134.3 million (125.2 million euro) support package to assist Moldova's government in mitigating the socio-economic impacts of Russia’s invasion of Ukraine, particularly on refugees and households.
The budget support measure also aims to bolster Moldova’s resilience and enhance competitiveness to reduce vulnerabilities to future shocks, the World Bank said in a press release on Thursday.
The package includes contributions from the International Monetary Fund (IMF), the EU, and bilateral partners. Of the total amount, $100 million is an International Bank for Reconstruction and Development (IBRD) loan, $9.3 million comes in the form of a financing grant from the Moldova Development Policy Multi-Donor Trust Fund (MDTF), while $25 million represents a contribution from the Global Concessional Financing Facility (GCFF).
Contributions to the MDTF have so far been received from the US, Norway, Ireland and Sweden, with additional partner support expected in the coming months, as well as financing from the Japan International Cooperation Agency.
The World Bank’s board of executive directors approved the support package as part of the Second Emergency Response, Resilience, and Competitiveness Development Policy Operation (DPO2) for Moldova.
The DPO2 is focused on providing legal status and integration support to Ukrainian refugees, enhancing social protection programmes for households affected by the invasion and the energy crisis. The operation is also aimed at improving energy efficiency, enhancing the legal framework for deposit guarantees, the corporate governance of state-owned enterprises, supporting railway sector reorganisation, and facilitating the digitalisation of public services for businesses.
The support measure is set against the backdrop of a considerable drop in Moldova’s gross domestic product (GDP) due to disruptions in trade, remittances, the energy crisis and climate-related weather conditions. Coupled with the fiscal pressures of supporting refugees and households as well as an unfinished development reform agenda, these pressures highlight the need for support both for immediate challenges and long-term transformation.