Facilitating green public investments in Moldova with a focus on clean urban public transport

Moldova aspires to enter a greener path of its economic development path, in particular by reducing the energy and carbon intensity of its economy. Strengthening public environmental expenditure management is one of the key enabling elements in this context.

The project aims to demonstrate how to use scarce public funds to incentivise the private sector to invest in clean and socially important projects. The main objective of the project is to transfer practical skills and know-how to government specialists with responsibilities for managing green public investments.

Together with public procurement, public expenditure programmes constitute an equally important part of green public investments. These programmes are designed to be supported with public funds, either in form of direct aid (e.g. subsidies in form of grants, conditional loans) or indirect one (such as loan guarantees), but still primarily financed by private investors. Nevertheless, utilising effectively public resources – both budgetary and personnel – will help reach country’s national environmental and climate-related objectives as well as increase the overall well-being if its citizens.

The EU4Environment Action will provide a practical-oriented capacity development measures (targeted trainings), although technical assistance (desk research) will again constitute an important prerequisite for further work and successful completion of the assignment.

The assistance will include following activity areas:

  • Support in seeking additional funds (domestic and international) for co-financing the green public investment programme.
  • Support in establishing the unit responsible for implementing the green public investment programme.
  • Support in training the allocated staff of the programme implementation unit in acquiring additional funds.
  • Support in training the allocated staff of the programme implementation unit in project cycle management.

This project builds on a recent collaboration with the Ministry of Agriculture, Regional Development and Environment of Moldova in the area of greening public expenditure. The initial project was implemented in 2017-18 and helped increase the capacities of public authorities to better design and cost priority green public investment programmes within national medium-term expenditure frameworks (MTEFs). Such multi-year investment programmes are better positioned to successfully compete for public support – both from national and international sources – and leverage private investments into projects or sectors that would otherwise be seen as not profitable (at least, in the short run).

Specifically, a sectoral Clean Public Transport (CPT) Programme has been prepared, in line with international good practices. The main contribution of the accompanying costing model was to calculate the required financial involvement – of both public and private sector – and the corresponding environmental, climate-related and socio-economic outcomes that the renewal of public transport fleet would bring about. The results of this work was presented in a study “Promoting Clean Urban Public Transportation and Green Investment in Moldova” that has put the investment programme into a broader (implementation) framework.

Accordingly, the above-outlined activities will focus on managing (country-wide) public expenditure programmes in Moldova with a special focus on cleaner mobility. In this way, the enhanced capacities of Moldovan professionals will enable the national public authorities to implement the designed CPT Programme and, more importantly, similar low-carbon investment programmes in the future. This combined specific and generic approach will contribute to sustainability of the intervention.

Published on 29/09/2020

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