Moldova

Since June 2024, Moldova has been a candidate country for EU membership. The country is undergoing several reforms, the implementation of which was significantly accelerated by the outbreak of the war in Ukraine and its consequences for Moldova and, of course, the accession negotiations with the EU. 

Programme support for Moldova

In 2009, Moldova was designated as a priority country in Slovakia’s mid-term ODA strategy, a status that remains in place. The Slovak Ministry of Finance began its engagement in Moldova following a Memorandum of Cooperation between the finance ministers in early 2011. 

Since the inception of the cooperation, the core focus of support to Moldova has been centered on budgeting assistance. Our current activities in Moldova aim at supporting Moldova’s SDG financing, including in the area of public finance for development, and building resilience of the society. Mobilizing private resources resulted in supporting a project on energy efficiency reconstruction of the buildings belonging to public authorities. Moldova has been a Programme partner since 2011. 

I am always impressed by the Public Finance for Development team’s commitment to quality and to shared success. They approach the topics not only from a theoretical but also from a practical perspective. They demonstrate a high level of expertise and a passion for what they do. With confidence in the continuation of this successful collaboration, we look forward to working together on future projects and continuing to grow and prosper. UNDP and the Slovak Ministry of Finance are a valuable partner and essential to our success.

Olga Golban

Director of the State Tax Service, former State Secretary of the Ministry of Finance - Moldova

We are interested in the systematic control of public spending and identifying potential areas where we can save on low-priority, inefficient or ineffective spending, so that we can use the savings in implementing the necessary reforms. The Ministry of Health and Ministry of Labor and Social Protection benefit from support from Slovak experts in the process of spending review, which at a later stage will be institutionalized and periodically implemented by all public authorities.

Veronica Sirețeanu

former Minister of Finance - Moldova
PUBLIC FINANCE

Together with the Ministry of Finance of the Republic of Moldova, we aim to establish a robust framework for SDG financing. Current focus is on two areas: 

  1. Budgeting for SDGs – align public and private financial resources with SDG financing, utilizing spending reviews as a key instrument  
  1. Tax for SDGs –develop policies to achieve specific SDGs, assess the impact and effectiveness of tax expenditures in achieving development goals, and adjust the local public finance system alignment with the Public Administration Reform Strategy (PARS) and PFM strategy. 

Key achievements

  • Spending reviews: Since 2018, as part of our support for efficient and transparent budgeting, we have been assisting in the establishment and implementation of expenditure reviews (spending reviews). These revisions help identify inefficiencies in budget spending, enabling the redirection of savings to other critical government priorities. To date, evaluations have been conducted in the education, agriculture sectors (in collaboration with the IMF), and in healthcare, specifically for pre-hospital emergency care, primary healthcare, specialized ambulatory care, and community and home healthcare. The findings from the healthcare expenditure review have already been reflected in the 2024 state budget.

In 2021, based on results and experiences with implemented spending review, the Public Spending Review Methodology was developed for the government. The assistance is provided through workshops and practical on-the-job trainings, where Slovak consultants work directly with Moldovan colleagues to implement the expenditure reviews. In 2021, an interdepartmental committee was established to oversee the implementation of the development financing assessment methodology. Expenditure audits have now become a legally mandated component of the state budget creation process.

 

  • Development Finance Assessment (DFA): We facilitated the identification of new opportunities to finance long-term national priorities through the DFA. The DFA serves as a vital tool for the government and ministries when proposing measures in the Public Finance Management Strategy for 2023-2030. Additionally, the project supported the strategy itself, which specifically targets tax and customs policies.

 

  • Program-Based Budgeting (PBB): As part of our efforts to support the introduction of PBB, we developed a Practical Guide for Local Public Authorities on Implementing PBB and a Methodology for PBB Monitoring and Evaluating.

Alongside this, we consistently invested in capacity building for PBB implementation. In 2012, we developed a PBB Training Program, including a curriculum and training materials. In 2016, following a PBB capacity assessment and training needs analysis, we conducted a comprehensive update of the programme. In 2016, we also further enhanced capacity building by developing a training package focused on monitoring and evaluating program budgets, followed by training sessions for authorities on performance monitoring and reporting. To ensure the sustainability of acquired knowledge and ongoing education, each capacity-building module also included a training-of-trainers component. 

RESILIENT POLICY FRAMEWORK

In 2022 – 2024, PPFD in Moldova also supported a project that reflected the need to plan and allocate resources for socio-economic recovery and resilience following the COVID-19 pandemic, the energy crisis and the escalating security situation in Ukraine. 

Key achievements

  • The government of Moldova adopted its National Security Strategy with substantial support from the project. This strategy emphasizes the modernization of the armed forces, the peaceful resolution of the Transnistrian conflict, regional and global security partnerships, and anti-corruption measures. 
  • UNDP through this project led the development of a nudging programme that promotes the use of differentiated tariffs to reduce electricity demand during peak hours. This innovative approach is designed to encourage more sustainable and efficient energy consumption among households and businesses. In collaboration with the Ministry of Energy, this initiative serves as a precursor to a larger project called Accelerating Just Energy Transition, which is part of the Energy Efficiency and Climate Change Cluster. 
  • In response to the energy crisis accompanied by the drastic increase in gas prices, UNDP focused on supporting the government in managing the energy situation and alleviating energy poverty. The project contributed to the creation of the concept and establishment of the Energy Vulnerability Fund of the Republic of Moldova and the Information System Energy Vulnerability Fund. The Fund is an independent information system that catalogs and processes household requests for classification according to energy vulnerability and manages the allocation of bills compensation. These compensations significantly reduced energy costs for approximately 895,000 households, 78% of which fall into the category of very high energy vulnerability. This initiative significantly improved the living standards of vulnerable families by alleviating their financial costs and allowing resources to be allocated to other critical needs. 
PRIVATE SECTOR ENGAGEMENT

In the area of private sector engagement, we supported one project through Resource Mobilization Facility (RMF) – energy efficiency of Ministry of Defense infrastructure in Moldova. This project that was implemented in 2023 – 2024 piloted an evidence-based approach to energy efficiency (EE) reconstruction of the buildings belonging to public authorities. Energy audits of two selected buildings were conducted and short-term and long-term measures to increase EE were proposed. Their implementation is dependent on financing available.  

The project also set the ground for evidence-based budgeting within the central public administration addressing the EE reconstruction of public buildings. 

UNDP in Moldova website