OREANDA-NEWS. October 27, 2014. A EUR 7 million loan agreement between Moldova and EBRD for Balti heating system rehabilitation to be signed on October 30.

This was a matter raised at a meeting between Moldova’s Vice-premier, Economy Minister Andrian Candu and Head of the EBRD Board of Directors Heinz Kaufmann. The officials discussed matters of the energy sector, progress in the implementation of joint projects and the Strategy of development programmes.

According to Andrian Candu, the loan is going to be allotted to the modernization and enhancement of heating services in the municipality of Balti, aimed at reducing natural gas consumption by the local heating system. When implemented, the project will contribute to Moldova’s energy security.

As it was said earlier, the EUR 7 million loan is to be provided for 15 years at LIBOR plus margin of 1% to 2% with a 2 to 3 year-long grace period. The Eastern Europe Energy Efficiency and Environmental Partnership (E5P) is expected to provide Moldova with EUR 3 million more to have this project, worth a total of EUR 10 million, implemented. The project will be beneficial both economically and ecologically. The power production will increase and the annual power saving will amount to MDL 52 million.

The sustainable and efficient functioning of the heating system of the municipality of Balti will be ensured. Thanks to the technological modernization and reduction in carbon gas pollution the environment in Balti will improve. The feasibility study for the programme was carried out by AF Industry (Sweden) and Tehno Consulting & Design Moldova with the support of EBRD and the Sweden Agency for International Cooperation and Development.

The investment program stipulates installation of 3 gas turbines to raise power production 60% (the investment required is estimated at EUR 6.1 million); replacement of obsolete pumps, fans and smoke exhausters (EUR 700,000); replacement of a coal boiler in Balti with a bio fuel one (EUR 150,000); construction of boiler rooms in 120 houses in Balti in which about 28,000 people live (EUR 2.7 million). The investment programme is expected to help enhance the quality of the heating system, recommence the hot water supply and reduce electricity costs in Balti.