Closed Compact Report: Moldova Compact | May 2017

Compact Changes

Road Rehabilitation Project

  • Because of cost savings, MCC was able to reallocate $21 million dollars in 2013 from the Road Rehabilitation Project to cover budget shortfalls in the THVA Project’s Centralized Irrigation Systems Rehabilitation Activity.

Transition to High Value Agriculture Project

  • The Centralized Irrigation Systems Rehabilitation Activity component of the THVA Project underwent a successful midstream correction in 2012-13. MCC determined that the strategy of partial rehabilitation reflected in the original project design was neither optimal nor feasible due to higher than anticipated costs. The redesign resulted in new pipe layouts, which better served current land use patterns and brought in newer, more energy-efficient technology. While the costs were higher, estimated ERRs remained sufficiently strong at the time of the midstream correction. The program was able to use $21 million in savings from the Road Rehabilitation Project to make the redesign possible.
  • Because of increases in rehabilitation costs outlined above, the maximum scope of the Centralized Irrigation Systems Rehabilitation Activity was reduced to 10 centralized irrigation systems with a surface of approximately 11,500 hectares (not including potential extension areas) from the original maximum of 11 central irrigation systems and approximately 15,500 hectares. Although high costs and technical challenges meant only 10 of the original 11 irrigation systems were constructed, all 11 Water User Associations were formed and trained.
  • Eligibility criteria for financing under the AAF Activity were modified several times throughout the compact to better target farmers and achieve the objective of the activity. In October 2012, MCA-Moldova reduced the scope of coverage under the AAF Activity from nationwide to the 15 administrative units expected to offer benefits to centralized irrigation systems producers. These units were chosen based on proximity to centralized irrigation systems investments and their location near command areas and major markets for fresh produce. In light of consistent demand for AAF Activity loans outside the areas served by the rehabilitated centralized irrigation systems, MCA-Moldova re-broadened the geographic scope of the activity in April 2015 to reach additional beneficiaries.

In 2015, the AAF Activity was expanded to include a leasing component to provide financing for on-farm irrigation and other equipment. Compact funds were added to 2KR, an existing leasing facility created and supported by Japanese and European Union donor funding.