Closed Compact Report: Moldova Compact | May 2017
A few preliminary lessons can be drawn from the challenges implementing the THVA Project ahead of compact evaluations.
Information collected in 2015 indicates a lower impact of the THVA Project than initially estimated, partially due to lower than anticipated rates of transition by farmers to the new irrigated systems. While the compact included support for behavior change activities in the design of the THVA project, the project may have benefited from a more robust incorporation of behavior change with mechanisms included in the project to ensure that it occurred and continued to be prioritized during implementation. Additionally, the irrigation infrastructure was completed very close to the end of the compact, which limited the amount of support that could be provided under the project for behavior change activities and training. Construction schedules could have been monitored more closely to ensure that there was ample time for training and support of adoption following completion of the projects.
Another challenge for the THVA Project was a sharp depreciation of the Moldovan currency, which raised the price of imported equipment and reduced the buying power of farmers. Some exchange rate volatility is normal, but this was exceptional in the wake of the global financial crisis. This is not the first compact where the closeout ERR was impacted by unexpected exchange rate shocks. Future MCC compacts can consider financial tools that can reduce the risk of exchange rate volatility.