OREANDA-NEWS. November 06, 2014. Moldova has received a EUR 7 million loan from the European Bank for Reconstruction and Development (EBRD) to modernise district heating in its second largest city, Bal?i. Moldovan Prime Minister Iurie Leanca and EBRD Deputy Director for Municipal and Environmental Infrastructure Lin O'Grady signed an agreement in this regard in Bal?i.

With a potential investment grant of EUR 3 million from the Eastern Europe Energy Efficiency and Environment Partnership (E5P), the total financing of EUR 10 million will be extended to the state-owned company CET-Nord JSC which provides district heating services to 75 per cent of the city’s population, as well as to numerous public buildings and commercial entities.

The company will use the financing to upgrade its district heating system, increase energy efficiency, reduce operating costs and CO2 emissions. Individual heating sub-stations will be installed in residential buildings, allowing customers to control heat supply and reduce energy waste. In addition, three energy-efficient combined heat and power generation plants will be installed. The heat generation system will be modernised to reduce losses and a coal-fired boiler will be converted to use locally sourced environmentally friendly biomass fuel.

As part of the project, the EBRD will also help design a programme to support corporate development at the CET-Nord JSC and help the company adopt a commercial approach to ensure it delivers reliable and sustainable services.

Lin O'Grady, Deputy Director for Municipal and Environmental Infrastructure at the EBRD said: “Investing in better district heating in Bal?i means more comfortable winters for over 100,000 people. Networks and equipment will be renewed to make sure they continue to provide heating to Bal?i homes. But most importantly, customers will have greater control of the heating system in their homes. These and other improvements will help save a considerable amount of energy which in the long run will be reflected in lower tariffs.”

Upgrading Bal?i’s district heating is likely to be the first project to tap into the E5P fund which Moldova has recently joined. E5P is a multi-donor fund pooling contributions from the European Union, as the largest contributor, and 12 countries to provide grant financing alongside loans from international financial institutions, including the EBRD, to help municipal authorities invest in concrete projects improving energy efficiency and the environment. It is expected that the E5P fund will be widely used across Moldova in the coming years.

The EBRD has also partnered with the Swedish International Development Cooperation Agency (Sida) which funded a study to determine the feasibility of this investment and will provide further funds to support CET-Nord JSC’s corporate development programme and the implementation of the project.

The EBRD is the largest institutional investor in Moldova. The Bank focuses on supporting private sector activity, promoting European standards and regional integration and developing efficient and sustainable public utilities. To date, the EBRD has invested some €900 million in over 100 projects.