Moldova to develop new credit guarantee instrument for investments in energy storage systems

Economic operators will be able to benefit from a new credit guarantee product intended for investments in battery energy storage systems (BESS). The instrument will facilitate investors’ access to financing and will contribute to the development of the energy infrastructure needed to integrate an increasingly larger volume of renewable energy. Authorities estimate that the new financial instrument will be approved at the beginning of September.

The product is being developed by the Ministry of Energy, in partnership with the Ministry of Economic Development and Digitalization and the Organization for Entrepreneurship Development (ODA).

During a meeting dedicated to presenting the concept of the new instrument, State Secretary of the Ministry of Energy Carolina Novac emphasized that the development of energy storage capacities is a priority for strengthening the energy security of the Republic of Moldova. According to the official, as installed capacity from renewable sources increases, storage systems become indispensable for ensuring the flexibility of the power system.

“Creating a credit guarantee instrument will reduce risks for the banking sector and encourage private investment in a strategic field for the country’s energy future,” said Carolina Novac.

After the completion of the consultation process and the integration of proposals submitted by stakeholders, the product will be submitted for approval to the Organization for Entrepreneurship Development.

The main objective of the instrument is to facilitate investors’ access to financing by reducing the risk assumed by financial institutions and creating the necessary conditions for the accelerated development of electricity storage capacities. Among the measures under consideration are the establishment of state aid mechanisms for investments in BESS, as well as the possibility of deferring the payment of import VAT for a certain period.

Authorities are also examining the removal of the requirement for a construction permit and a zonal urban plan for BESS installations and renewable energy parks, with the aim of shortening administrative timelines and speeding up investments. Currently, the storage capacity of the approximately 30 batteries in the country is 150 MWh, which is below 10 percent of peak-hour demand. According to authorities’ estimates, the capacity could more than quadruple by the end of the year, which would mean private investments of about 150 million euros. At present, the state exempts renewable energy producers who purchase storage batteries from import duties and quickly refunds VAT to their accounts.

Estimates show that the country needs about 600 MWh of storage capacity, which is prompting authorities to analyze opportunities to offer incentives for investments in BESS.