The Credit Guarantee for Renewable Energy Producers in Moldova was a targeted financial instrument implemented by the Organization for Entrepreneurship Development (ODA) to improve SME access to finance for renewable energy investments. The guarantee supported both new and existing enterprises seeking loans for renewable energy generation to feed into the national grid. Through this risk-mitigation instrument, banks were able to lend to SMEs that would otherwise be excluded from credit markets. The mechanism operated through a network of partner banks and offered favourable coverage and terms, helping to mobilise private investment at low public cost. Introduced amid a renewed push for strengthening Moldova’s energy security, it complemented government measures promoting renewable energy production.
Organization for Entrepreneurship Development – credit guarantee for renewable energy producers in Moldova
Abstract
The Credit Guarantee for Renewable Energy Producers was one of six individual guarantee products offered by the Organization for Entrepreneurship Development (ODA) in Moldova. It was aimed at all types of SMEs, including newly established enterprises seeking investment loans for renewable energy production - primarily solar, but also wind and other sources - for the purpose of feeding electricity into the national grid. Launched in 2022, the guarantee product was active until the end of 2023, with a total budget of EUR 3.4 million. The guarantee provided access to credit, in the form of loans, from eleven participating banks in Moldova.
The credit guarantee was offered on favourable terms, providing a coverage rate of 70% of the loan amount and covering the whole loan tenor. The maximum available guarantee amount was MDL 5 million (EUR 250,000). The ODA charged a low commission fee, at 0.5% annually, which was paid monthly from the balance of the guarantee.
To apply, SMEs first had to seek a loan from one of the eleven partner banks. If the applicant lacked sufficient collateral, the bank and SME could jointly submit a guarantee application to the ODA. The ODA typically processes applications within five working days. Loans provided by participating banks were provided under normal financing conditions.
The guarantee product covered all economic sectors of SMEs of Moldova. Applicants had to hold the status of being a renewable energy producer, which they could obtain from Moldova’s National Energy Regulatory Agency (ANRE). Solar PV panels needed to have a European certification and had to be insured. There were no eligibility requirements on financial performance or years of operation.
The product was designed to address a financing gap that certified renewable energy producers, especially start-ups, faced due to their inability to meet the high collateral requirements of banks. While existing ODA guarantee products offered sufficient coverage for established companies, the guarantees available to newly created enterprises did not, limiting their access to capital. This guarantee product aimed to directly address these barriers, increasing the available guarantee amount and removing financial eligibility barriers, making the ANRE certification the sole entry requirement.
The guarantee product witnessed widespread uptake, unlocking EUR 8.9 million in loans and generating a total of EUR 14.5 million in investments into the Moldovan economy
ODA operates under the Moldovan Ministry of Economic Development and Digitalization with the objective of developing entrepreneurship.
The 2022 energy crisis threatened energy supplies to Moldova, leading to increasing energy prices and prompting a move towards energy security and independence. In this context, the Moldovan Government wanted to expand the scope of domestically generated energy supplies and responded by liberalising the electricity market. ANRE increased installed renewable energy capacity limits from 70MW to 120MW and launched a tariff scheme, offering fixed ten-year tariffs to renewable energy producers. These measures created favourable opportunities for companies to invest into renewable energy production.
Guarantees were able to generate high impact at a low cost: The amounts provided by grant programmes were deemed too small in covering the financing needs of renewable energy producers, and the ODA lacked the mandate to offer investment loans directly. Guarantees effectively addressed collateral barriers, enabling banks to lend to SMEs, including start-ups, under favourable conditions.
Context-specific enabling factors: The fixed tariff scheme by ANRE guaranteed revenue, enabling ODA to remove traditional financial eligibility criteria, widening the scope of eligible companies.
Key challenges included:
Limited grid capacity: The increase in renewable energy generation has not been matched by investments into storage solutions, causing overproduction due to limited grid absorption capacity. ODA is now exploring financing options to support investments into energy storage.
Budget limitations: The requested guarantee values often exceeded ODA’s available funds. ODA is aiming to address this in future financing instruments through engaging in collaborations with international financial institutions, which is expected to unlock further capital.
Eligibility constraints: The ANRE certification requirements enabled low-risk lending, but also created administrative barriers, limiting participation. Future guarantee products could consider extending the scope to cover all start-ups and SMEs.
Unlocking previously unavailable financing: Financing to SMEs, including start-ups, who were previously excluded from the market, were able to gain access, in a way that came at a low cost for ODA itself. As such, the guarantee product can serve as a valuable model for designing future instruments focused on storage solutions.
Potential integration into blended finance structures: ODA is actively exploring this through partnerships with international financial institutions, with future plans of combining such guarantee products with concessional loans and grants.
Strong institutional reputation: Guarantees issued by the ODA are seen as trustworthy and reliable by banks, with banks only having to take on minimal risk portion. The already established collaboration with Moldovan banks through other ODA programmes proved helpful in swiftly developing a tailored solution, with the product being designed and implemented in just one month.
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