Efficiency savings and renewables key to Moldova’s long-term energy security, says EBRD

Moldova can achieve energy savings of as much as 40% in many of its buildings through higher energy efficiency measures, according to Catarina Bjorlin Hansen, the European Bank for Reconstruction and Development (EBRD) head of Moldova. 

In an interview with bne IntelliNews, Hansen highlighted efficiency investments as a critical element of the country’s long-term energy strategy, as it continues to navigate energy security challenges.

Moldova’s energy security has been a pressing issue, exacerbated by external shocks and supply vulnerabilities. The country has already taken some important steps toward diversifying its energy sources. Following Russia’s invasion of Ukraine and Gazprom’s sudden reduction in gas supplies in 2022, the country has been sourcing gas from the European energy grid, significantly reducing its reliance on Russian energy. Yet, challenges remain, particularly in terms of affordability.

Persistent worries about energy security have been a drag on GDP growth, which came in at just 2.2% in the first half of 2024. 

Starting with demand  

Commenting on Moldova’s energy security, Hansen stressed the importance of improving energy efficiency to rein in demand. 

Moldova has a significant opportunity to cut down its energy use, particularly in older buildings, which were designed without modern energy standards in mind, Hansen pointed out. 

“When you look at energy supply, you need to start with the demand. If the demand can go down by 40-50%, that’s part of the bigger picture,” she said. 

In addition to diversifying energy sources, Hansen highlighted energy efficiency as a key area where Moldova could make rapid gains. “Many of Moldova’s buildings, especially from the Soviet era, are extremely inefficient. Heating systems are outdated, and most buildings lack proper insulation,” according to Hansen. 

"We need to move from heating entire buildings to heating individual apartments, where residents can control their own usage and be billed based on consumption.”

The EBRD, alongside the European Investment Bank (EIB) and the European Union announced in 2021 they were jointly providing €75mn to improve energy efficiency and reduce the energy consumption of public buildings in Moldova in the first national energy efficiency project in the country. The project targeted buildings including hospitals, schools and kindergartens. 

The development bank is now preparing additional projects focused on energy efficiency in both the public and residential sectors. 

“There is a huge need for renovation because many of the buildings are rather dated,” Hansen said. 

“We look at schools, hospitals and municipal buildings and other [international financial institutions] IFIs are doing the same. There is a lot of ground to cover.” 

Earlier this year, the Moldovan government set up the Moldovan Residential Energy Efficiency Fund (MREEF) in collaboration with international partners, targeting residential upgrades. 

The programme's goal is to refurbish a minimum of 507,000 square metres of heated residential buildings, covering approximately 8,500 apartments or 5,000 standalone houses. By 2027, it aims to generate energy savings of at least 66.9mn kWh in households, equating to over MDL100mn (€5.1mn), a government statement said.

“If you can save more than 40% [of energy consumed] then it really does make sense,” said Hansen. 

Diversification to renewables 

The EBRD and Moldova’s other international partners supported the country during the gas crisis, supporting Moldova with a €300mn facility to help cover gas purchases. This was expanded in 2023 with a €199 package comprising a €165mn EBRD loan and €34mn grant from Norway.

In the longer term, Hansen stressed the importance of diversification, including through investments into renewables. 

The country is currently holding tenders for 165 MW of renewable energy projects, a development Hansen described as a “very good first step” toward building a more diversified and sustainable energy sector.

"The country has a lot of potential especially in solar — Moldova has 300 days of sunshine a year,” she said.

Looking ahead, Hansen expects more will be done to scale up renewable energy production, given the potential the country has in this area. 

Currently, renewable energy in Moldova is limited to smaller, private installations, which are not yet at the scale needed to significantly impact the country’s energy supply.

However, with the launch of the renewables tenders this is starting to change, with the first larger installations expected to come online in 2026. 

“We are very keen to support sustainable solutions in the energy sector to make sure Moldova has a long-term secure energy supply, because it really makes a difference for developing all industries. Investors look at energy security, so we need a good solution that will be in place for many years to come,” concluded Hansen.