Project Summary:

Since October 2021, Moldova faced significant increase of gas prices due to very tight global energy markets and the dependence on external suppliers. With the war in Ukraine, the energy crisis has only deepened: the country has faced a reduction of gas supply and price increase.

Compared to last year, Moldovan households are faced with a gas prices six times as high as last year, and twice as high as in Romania, with a similar trend for electricity.

Energy vulnerability and poverty is an emerging form of poverty in Moldova, given the consequences of the energy crisis and the potential impact of the energy inflation on incomes of the Moldovan households. The early income simulation by UNDP suggests that approximately additional ¼ of the households (the number of people living in poverty could increase by about 250,000 people) are at risk of falling below poverty line due to the very high inflation.

To tackle the impact of the energy crisis and with technical support from UNDP, the Government of Moldova launched on 12 October 2022 a national platform for Moldovan households to apply for compensation for energy price increase through the platform.

Objective:

• To further support the implementation of the Energy Vulnerability Reduction Fund (EVRF), develop and implement specific additional interventions to compensate most vulnerable households and alleviate the pressure on the public budget.

Expected results:

• Up to 200,000 Moldovan very highly vulnerable households’ (including refugees’) energy bills are compensated;

• The EVRF team within the Ministry of Labour and Social Protection is fully functional and capacitated to implement and improve the EVRF.

Accomplishments:

• Up to 895,000 households, including refugees — approximately 75% of all Moldovan households — have benefitted from on-bill compensations during November 2022-March 2023. Out of these, 595,535 benefitting households were ascribed a very high category of energy vulnerability; 

• According to the UNDP impact assessment of the Fund, the compensations reduced the level of energy poverty by 43% and had the greatest impact on the most vulnerable families;

• The Department of Energy Vulnerability and Reduction of Energy Poverty Policy within the Ministry of Labour and Social Protection has been formed and fully trained and capacitated to implement and improve the EVRF.