With a USD 50 million pledge, the European Bank for Reconstruction and Development has arranged a financial safety net to help Moldova secure gas supplies for the coming winter in case of an emergency, the bank has said.
Moldova, which relies on gas from Russia and has no storage for the fuel, faces the risk of disrupted supply should Russia and Ukraine fail to extend a gas transit agreement that expires on December 31, 2019.
Under the agreement signed in Chişinău on December 11 by Moldova’s Prime Minister Ion Chicu and EBRD managing director for Eastern Europe and the Caucasus Matteo Patrone, the EBRD will issue an on-demand, standby letter of credit of up to USD 50 million to guarantee the payment obligations of the Moldovan state energy importer Energocom.
The financial arrangement will enable Energocom to purchase one month of natural gas supply from Ukraine’s Naftogaz, to avoid any gas supply risk.
Naftogaz will procure, through open tenders with EU suppliers, up to 0.4 billion cubic meters of gas, which will be delivered to Energocom and distributed to customers in Moldova by the national gas distribution company Moldovagaz, the EBRD said.