This decision marks one of the most important institutional changes in the electricity sector, as it concerns not only the legal form of the company, but also the way in which the transmission system operator operates in a technically synchronized market increasingly integrated with the European area.
From idea to concrete plan
The idea first emerged last December.
At that time, the EU High Energy Adviser Alexandru Sandulescu spoke about the necessary steps for Moldova’s energy market and drew attention to the fact that after the emergency synchronization with the continental system, one of the urgent problems remains the functioning of the competitive balancing market “in accordance with the requirements of the EU package for the integration of the electricity market”.
Moldelectrica’s transformation follows the same logic: an electricity transmission operator integrated into the European market needs operational autonomy, corporate governance, rules for non-discriminatory access to the network and institutional capacity for investment.
And now it appears that the authorities are ready to start implementing this plan. The explanatory note to this project substantiates many aspects of the future transformation of SOEs into JSCs.
Why it is necessary
In the European energy market, the transmission network cannot be operated as a technical instrument of the state. It must be operated by a neutral entity making its own decisions, independent of the interests of producers, suppliers, traders and the political cycle.
This is what the transformation of Moldelectrica is all about: moving from the logic of a state-run enterprise to that of a system operator, where network access, balancing, investments, maintenance and interconnections are determined by technical, economic and energy security criteria.
The joint stock company form introduces a more rigorous accountability system: board of directors, management, audit, performance, reporting and corporate control. The state remains the owner, but the operator is no longer obliged to act according to the reflexes of a politically subordinated institution.
Privatization is not envisaged
The reorganization does not envisage privatization of strategic assets. Moldelectrica is to become a joint stock company with 100% state capital, while the transmission networks remain in state ownership. The company is included in the list of assets not subject to privatization, according to Law no. 121/2007 on the management and denationalization of state property.
In other words, the state does not transfer critical infrastructure, but changes the model of its management.
In the case of Moldelectrica, the distinction between privatization and corporatization should be seen in the key aspect of control over the infrastructure, rather than in terms of changing the legal name.
Privatization implies the transfer of ownership to private investors. Corporatization retains the state as the sole shareholder, but places the company in a corporate governance regime with separate management bodies, auditing, financial reporting, performance indicators, management responsibility rules and clearer control mechanisms.
Under this formula, the authorities claim Moldelectrica’s transition from a directly managed enterprise model to an operator organized according to standards compatible with ENTSO-E requirements, European Community legislation and the Energy Community framework.
Freedom of decision making
In many European countries, critical infrastructure companies operate according to this architecture. The state remains the owner, but the company is not run as an extended ministry. It has a board of directors, governance, reporting obligations, transparency rules, and institutional separation from day-to-day political decision-making.
For a transmission network operator, this separation is not a legal whim, but a condition for operating in a regional market where network access, system balancing, interconnection capacity and investment planning must be carried out without discrimination.
The joint stock company form offers an institutional language closer to the one used by development banks, external lenders and European partners. Investments in transmission networks, interconnections, digitalization, dispatch systems or renewable energy integration require clear balances, reliable audits, traceable management decisions and credible investment plans.
It is more difficult for a state-owned enterprise managed in a classical registry to ensure such financial discipline. A corporate company, even if the state is the sole shareholder, can operate under more predictable rules, enter into financing contracts on more favorable terms, and demonstrate more clearly how it is using the capital raised to modernize infrastructure and improve the security of the electricity system.
Speak a language that Europe understands
Moldelectrica will function as a market infrastructure for the electricity sector, fulfilling its role in operating the transmission network, managing cross-border capacity, balancing the system and integrating regional energy flows.
From this position derives the importance of the operator for the connection of Moldova to the European market, for the use of interconnections with Romania, for the integration of renewable energy and for the provision of imports during periods of high consumption.
The quality of performance is assessed by specific technical and economic indicators: available interconnection capacity, level of network congestion, technological losses, response time, quality of dispatch, investment rate, scheduled maintenance, system stability and ability to integrate new energy sources.
Within this framework, the corporate form provides institutional support for multi-year investment decisions, management responsibility, financial reporting and operational control compatible with the functions of a European transmission operator.
There are questions
However, the reorganization also raises valid questions.
Thefirst concerns the actual content of management. A joint stock company does not automatically become more efficient simply by changing its organizational and legal form. Efficiency is only manifested if board members are selected professionally, if management has real autonomy, if performance indicators are measurable, if procurement is transparent and if political decisions are not made informally within the new structure.
The second issue concerns the long-term protection of strategic assets. The authorities claim that there is no privatization and the current legal framework keeps the networks in state ownership.
However, transformation into a joint stock company requires increased public control. Any subsequent changes in the shareholding structure, any transfer of assets, or any change in the legal regime of critical infrastructure must be transparent, justified, and subject to institutional control.
One of the sensitivities of the reform concerns the discretion created by the new organizational and legal form: a joint stock company offers more efficient management tools, but also transfers more powers to the board of directors, executive management, investment policy, contracts and internal reporting.
Without strict criteria of integrity, competence and transparency, this structure may facilitate opaque decisions, political appointments, targeted contracts or the preparation of subsequent asset changes.
Therefore, the assessment of the reform should be based on the new company’s charter, board composition, selection rules, external audit, financial reporting, investment plan and safeguards to keep critical infrastructure in state ownership.
From a strictly technical point of view, Moldelectrica’s transformation is part of the process of Europeanization of the electricity sector and the transition of the electricity transmission operator to a model compatible with integrated market rules.
From an institutional perspective, the reform tests the state’s ability to separate the state ownership of critical infrastructure from the current management of the company through a corporate structure with clearer rules of control, efficiency, reporting and management accountability.
So that the 8 billion lei does not disappear
The degree of deterioration of Moldova’s transmission grids ranges from 70% to 90%, and many of them have already exceeded their useful life. Approximately 8 billion lei will be invested in their rehabilitation over the next 10 years.
Energy Minister Dorin Jungietu said this in an exclusive interview with Logos Press.
“The problem of network wear and tear is an accumulated systemic challenge that has been forming for decades. And today, for the first time, we are approaching it not point by point, but through a comprehensive program of modernization of the entire infrastructure,” Dorin Jungietu said.
He added that a key step has already been made: the transmission system operator Moldelectrica has elaborated and the National Energy Regulatory Agency has approved a 10-year network development plan, which envisages investments of about 8 billion lei.
So, the structure of the joint-stock company allows for a much higher level of transparency in spending this huge money. And public attention to this process will be more than high.
State enterprises do not publish public reports on their work, while joint-stock companies, even with the state as a shareholder, are obliged to do it regularly. In the current conditions in Moldova, this is a significant argument.
Unless, of course, the next commission for emergency situations decides to classify this data as a commercial secret.
But then it will no longer be, as it was said above, “a language understandable to Europe”.
