Communal heating services in Moldova had seriously deteriorated during the 1990s. Municipal heating companies were defunct or bankrupt and, where functioning, provided poor quality, inefficient, and unreliable heat. Many schools and hospitals were not heated at all or were under-heated during winter, and staff, patients and students were often forced to wear coats, hats and gloves inside the buildings to stay warm.

In March 2003, the Energy II Project was launched with two major goals. The first goal was to improve the availability, quality and efficiency of heating in selected public buildings (schools, hospitals and clinics), primarily in small- to medium-sized towns. The second goal was to improve the security and reliability of the electricity transmission system as Moldova depends on electricity imports to meet two-thirds of its electricity demand. Along with the World Bank, the Swedish International Development Cooperation Agency (SIDA) co-financed the project, financing technical assistance for project implementation and contract supervision, as well as rehabilitation of heating systems for several educational and health institutions.

In order to improve the security and reliability of the electricity transmission system, the project comprises an electricity system upgrade component. Investments consist of rehabilitation and upgrade of metering in the electricity transmission network, power system dispatch, system telecommunications, and priority rehabilitation of the transmission network.

The original heating component was completed in September 2008 and the Republic of Moldova requested additional financing to scale up its impact. Heating and hot water improvements included demand-side investments consisting of energy efficiency rehabilitation of building envelopes and rehabilitation of building internal heat and hot water distribution systems to reduce heat losses. The supply side investments consisted of rehabilitation of external heat distribution pipes from the boiler houses to the buildings and installation of new gas/LPG-fired boilers with auxiliaries to reduce heat losses, improve heat generation efficiency, and facilitate affordable heat and hot water supply.

In addition to its energy efficiency impact, which helps mitigate the impact of rising energy prices, the project has had positive social welfare benefits. The project has been very successful in improving the living conditions of inhabitants of small towns and villages in Moldova and has made a visible difference in the lives of ordinary people. Strong project ownership by beneficiaries was a key criterion for selection of specific investment components. Schools and hospitals benefiting from the heating improvements in many cases have made their own investments for building envelope improvements.

"We heated the working rooms with electric heaters for four years, and the specialists had to cram into fewer rooms to save power. The air temperature was as low as 8°C in the corridors, and many patients with certain health problems risked catching a cold... We have been operating in comfortable conditions for two years now, which has resulted in a two-fold drop in the rate of morbidity owing to respiratory conditions among health workers." — Lidia Hanganu, Director, Ialoveni County Hospital

"If we take an overall look at the impact of the project, I would like to highlight that over 8,000 students and approximately 1 million visitors/patients/medical staff benefited from improved access to heating." — Tudor Copaci, Deputy Minister of Economy and Trade

• Where there was little or no heat before the project, now, modern energy-efficient heating systems with boiler efficiency of up to 92 percent are provided to 23 schools and 12 medical institutions, benefiting more than 8,000 students and 1 million patients/staff/visitors per year.
• About 170 school, hospital and residential buildings retrofitted under the project now have heat throughout the winter (compared to 0-30 days before the project).
• Losses in the electricity transmission and distribution networks were reduced from 37 percent in 2002 to 15 percent in 2007.
• Emissions of greenhouse gases were reduced with the switch from oil or coal to natural gas. Participating municipalities now receive carbon credits (about $10,000 per municipality).

• Supporting the adoption of energy-efficient technologies in priority public buildings helps demonstrate that energy-efficient boilers are a least cost and quick way to meet energy needs in an environmentally sustainable manner.
• Adoption of energy-efficient technologies is encouraged by visible impacts, at schools and hospitals, and the receipt of carbon credits. Many of the project towns have used their own funds to install energy-efficient boilers. For example, the town of Ungheni mirrored the project investment in 4 boiler plants by rehabilitating 10 additional plants using its own funds.

• Ministry of Economy and Trade
• Ministry of Energy

• Moldova Energy Project