World Bank approved a US$ 20.0 m. for the Moldova Social Investment Fund

June 17, 2004 – The World Bank today approved a US$20.0 million equivalent credit for the Moldova Social Investment Fund 2 Project (SIF 2). This project is a continuation of the first Social Investment Fund project, which was successfully implemented in rural areas over the last 5 years.

The objective of the project is to provide access to better quality of basic social and economic services in education, environment, water, roads and other services in poor rural communities and small towns. The project will also contribute to the development of capacity of community organizations, and to strengthening social capital. The project is closely linked to, and supports the objectives outlined in Moldova’s Economic Growth and Poverty Reduction Strategy Paper, and will help in establishing a regular feedback mechanism to reflect community experiences in changing national policies.

„This is a very important project that supports local level development and helps the poorest communities to help themselves,“ said Anush Bezhanyan, head of the World Bank team that designed the project. „The results of the first project were very encouraging, particularly in terms of supporting community organizations and networks, and introducing transparent mechanisms of implementation and accountability. With the second project, every effort should be made to have this good example continue at the village level, but also to expand it to small towns that had the sharpest decline in living standards in recent years. It is important to learn systematic lessons from the implementation which should help to make the project approach more sustainable.“

The project will provide funding for implementation of activities under the four main components:

  • The Community Development component will finance activities for rural community development, small town community development and community capacity building.
  • The Social Care Services Development component will finance activities for the social care services sub-projects and for the capacity building of local government and service providers.
  • The Communication, Monitoring and Evaluation and Capacity Building component will finance activities for capacity building of governmental institutions and learning of policy lessons, for communication, dissemination and replication of
    best practices, and for monitoring and evaluation.
  • The Project Management component will finance activities to support project implementation and will mainly support the SIF 2 Executive Office operations.

The total amount of the SIF 2 Project is US$ 29.17 million, out of which the IDA credit is US$20.0 million, US$1.53 million represents the Government’s contribution and US$3.73 million will be covered by local communities. The remainder is expected to be covered by donor co-financing grants. The project will be implemented over the period of five years: October 2004 to September 2009.

The World Bank credit will be disbursed on standard IDA terms, with no interest rate, and will be repayable in 40 years, including a 10-year grace period.

Moldova joined the World Bank in 1992. Since then, commitments to the country total approximately US$572 million for 24 operations.

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