MOLDOVA FOREST DEVELOPMENT PROGRAMME

The operation will support the modernisation of the forestry sector in Moldova during 2024-2028 through investments aiming to enhance forest governance and regulatory framework as well as strengthen the institutional capacities, infrastructure and equipment base. The programme will also reinforce the production capacity of forest reproductive material and focus on the restoration and rehabilitation of about 63,000 ha degraded lands and forests.

A first objective is to enhance Moldova's forest sector governance and regulatory framework, as well as its institutional and technical capacities, to ensure a clear vision to further develop the forest sector and alignment with the international best practices in sustainable forest management (SFM). A further goal is to improve forest health and growth, alongside the resilience of ecosystems and landscapes against climate change. The operation also intends to strengthen the supply of sustainable forest products and ecosystem services by promoting SFM practices and supporting forest resources conservation. The project is in line with the EU-Moldova Association Agreement and with the EU priorities on environment and climate, as well as the relevant negotiation chapters of the EU-Moldova Accession Negotiation Framework (2024) (e.g., Chapter/Theme 27 - Environment and climate change).

The investment programme mitigates substantial market failures by strengthening forests' supply for public goods as well as environmental, social and economic externalities by protecting them against soil erosion and biodiversity losses through investing in sustainable forest management (or SFM) practices.

The Project is consistent and aligned with European Union policies and the relevant programming documents, as well as with the partner countries' strategies and policies, as required by Article 35(1) of the Neighbourhood, Development and International Cooperation-Global Europe Regulation. The operation contributes to the EU priorities in Moldova under the Multi-annual Indicative Programme, especially to the Priority Area 3: Environment and climate resilience. The operation is also aligned with: (i) the EU-Moldova Association Agreement (signed in 2014), which includes principles for cooperation on biodiversity, SFM, nature protection and environmental matters; and (ii) the relevant negotiation chapters of the EU-Moldova Accession Negotiation Framework (2024) (e.g., Chapter/Theme 27 - Environment and climate change).

The EIB will extend to the Borrower advantageous pricing and loan maturities that match a very long economic life of the Project. Furthermore, the EIB offers considerable flexibility regarding drawdowns, encompassing both timing and interest rate options.

The promoter will be required to comply with the EIB's Environmental and Social Standards (ESS). The investment programme will strengthen the production of positive environmental, social and economic externalities by forests. In particular, the project will protect soils from erosion and prevent biodiversity loss through investments in SFM practices. These activities would also promote inclusive growth and sustainable economic development in Moldova. Compliance with relevant national legislation and alignment with EU environmental regulatory framework for forests, as well as with EIB ESS, will be further assessed during appraisal.

As part of the project appraisal, the EIB will carry out several assessments, including Moldova's procurement and governance systems. Based on these assessments, the EIB may opt either to rely on Moldovan procurement systems (to the satisfaction of the EIB), or to require the promoter to ensure that the project implementation or specific components will be undertaken in accordance with the EIB's Guide to Procurement and the relevant applicable EU public procurement rules.

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