At today’s meeting, the government approved the Regulation on the Issuance of Financial Guarantees and the Provision of Financial Compensation by the National Center for Sustainable Energy (CNED).
The new mechanism complements the existing financing mechanism for homeowners’ associations through the Moldovan Residential Sector Energy Efficiency Fund (FEERM), under which they can receive grants covering 70% of the cost of energy efficiency work.
One of the main obstacles addressed by the new mechanism is the lack of collateral or guarantees required to enter into a loan agreement. Thus, homeowners’ associations will be able to take advantage of financial guarantees from the government and partial interest subsidies on the loans they take out, which will facilitate the mobilization of the financial resources needed to carry out energy efficiency work.
This new tool, which facilitates access to loans, will make it easier for homeowners’ associations to cover the 30% equity contribution required to implement energy-efficiency retrofit projects in apartment buildings.
“For the Republic of Moldova, investments in energy efficiency represent some of the most important investments for the future. Through this mechanism, we are facilitating access to financing for homeowners’ associations and creating the necessary conditions to modernize a greater number of apartment buildings. Every renovated building means lower energy consumption and lower utility bills for tenants,” said Energy Minister Dorin Junghiu.
What the New Regulation Provides For
The regulation establishes the conditions under which CNED will issue financial guarantees and provide interest compensation on loans taken out by homeowners’ associations. Loans eligible for compensation must be denominated in Moldovan lei, have a maturity of up to seven years, and the effective interest rate borne by the beneficiary must not exceed 5% per annum. The maximum loan amount eligible for compensation is 10 million lei per beneficiary.
“This mechanism represents an important step toward accelerating the energy modernization of multi-story residential buildings. Through financial guarantees and interest compensation, we are offering homeowners’ associations a concrete tool that will make it easier for them to secure the necessary financing and implement larger-scale energy modernization projects. We aim to ensure that this support makes investments in energy efficiency an affordable option for an increasing number of resident communities,” said Ion Muntean, director of the National Center for Sustainable Energy.
Guarantees and financial compensation will be provided from the resources of the Moldovan Residential Energy Efficiency Fund (FEERM), managed by CNED, without allocating additional funds from the state budget.
The implementation of this mechanism will help expand energy-efficient retrofitting programs for apartment buildings under the FEERM state program, which has a budget of over 1.4 billion lei through 2027 and aims to modernize at least 507,000 square meters of housing, 50% of which is in apartment buildings, with annual savings estimated at approximately 100 million lei.
