Moldova Compact

  • Grant Total: $262,000,000
  • Grant Committed: $259,371,697
  • Grant Expended: $259,371,697
  • Signed: January 22, 2010
  • Entry Into Force: September 1, 2010
  • Completed: September 1, 2015

Moldova and the Millennium Challenge Corporation (MCC) have signed a five-year, $262 million MCC compact aimed at reducing poverty and accelerating economic growth. The compact focuses on irrigation reconstruction, access to agricultural finance, and the rehabilitation of an integral section of the country’s national road network.

Moldova is a low income country, the poorest country in Europe. Agriculture has long been the country’s economic foundation. Farming accounts for more than 40 percent of employment and 17 percent of the country’s gross domestic product. Moldova’s agriculture currently suffers from low productivity, contributing to high rates of rural poverty. In addition, the deteriorated quality of Moldova’s roads has been cited as a constraint to economic growth, as it raises the costs of internal and external production and trade.

Road Rehabilitation Project

The project will rehabilitate 93 kilometers of the M2 and R9 roads between Sarateni to a major junction north of the city of Soroca. The road works will also include small community infrastructure improvements in towns and villages along the road, as well as a feasibility study, environmental and social impact assessment, detailed design and resettlement action plan.

Transition to High Value Agriculture Project

The objective of the Transition to High Value Agriculture Project is to increase agricultural incomes by stimulating the production and improved marketing of high value fruit and vegetables. The project primarily targets farming communities located along the two major rivers, the Prut to the west and the Nistru to the east, but will also benefit areas of the country already able to access irrigation water and produce high value agriculture.

Under the project, Moldova’s MCC Compact funding will repair up to 11 large irrigation systems servicing 15,500 hectares, providing water for high value fruits and vegetables as well as higher yielding grain production. Technical assistance and capacity building will support the establishment of water user organizations able to manage and operate the rehabilitated irrigation systems; the legal transfer of responsibilities for operations and maintenance of repaired irrigation systems to water user organizations; improve water resource management by the government; and ensure the legal and institutional framework needed for irrigation sector sustainability and further private and donor investment.