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Moldova's energy self-sufficiency is very low. Only about 20% of its energy demand can be covered by domestic sources. The country is therefore highly dependent on imports of energy resources. In the last couple of years, Moldova began to reduce its reliance on Russian gas. Currently, Moldova receives all its gas from non-Russian sources. However, until December 2024, about three quarters of Moldova’s electricity supply were dependent on the gas power plant Cuciurgan/MGRES, the largest power plant in the region of Transnistria that provided electricity across Moldova. MGRES converts Russian gas into electricity for sale to the right bank. The plant’s natural gas supply used to be based upon the transfer of natural gas from Russia through Ukrainian transit, which ceased to be possible at the end of 2024. Starting with January 2025, MGRES is not providing electricity to the right bank of Nistru River and is not using any longer Russian gas. Thus, the Right-bank is purchasing electric power on a daily basis from the European market via Romania and Ukraine to compensate the lack of supply from the Cuciurgan power plant/ MGRES, which has resulted higher purchase costs and an increase of regulated end-consumer tariffs of around 75%.
To address the high costs of energy in combination with high vulnerability of the Moldovan population the project provides sector budget financing aiming at securing the funding of the Energy Vulnerability Reduction Fund (EVRF), thus directly supporting the people of Moldova in coping with the energy crisis. The project shall be implemented in the heating season 2024/2025 (November 2024 – March 2025). Through this initiative, eligible Moldovan households will receive monthly direct cash transfers during the heating season 2024/2025. The amount of subsidy depends on the household-specific vulnerability assessment, which among others will be based on available income and household size.