Growth and Resilience Development Policy Operation DPO

About the project

The proposed standalone Development Policy Operation (DPO) supports the Government of Moldova (GoM)’s efforts to assist refugees and households in the face of the fallout from Russia’s invasion of Ukraine while keeping momentum on the long-term agenda of economic convergence to the European Union (EU) and climate resilience. The operation consists of a loan in the amount of US$40 million and a further US$15.5 million amount including concessional support and a grant as described later in detail. The DPO comprises three pillars: strengthening resilience of refugees and households (Pillar 1); fostering sustainable growth through enhanced competition and private sector-led growth (Pillar 2); and supporting climate resilience (Pillar 3). Pillar 1 focuses on enhancing the last-resort social protection system ‘Ajutor Social’, supporting refugees and women’s participation in the labor market, and protecting the most vulnerable and refugee host families from rising energy costs. Pillar 2 aims to strengthen the regulatory framework for competition and the state aid system, enhance governance and competition in the energy sector, and strengthen the banking deposit guarantee scheme. Reforms in Pillar 3 promote energy efficiency, renewable energy uptake, and sustainable forest management.

Project Development Objective (PDO)

The DPO aims to (i) strengthen resilience of refugees and households, (ii) foster sustainable growth through enhanced competition and private sector-led growth, and (iii) support climate resilience.

Project Implementation Status

Approved on June 14, 2024 and effective by September 11, 2024, provided US$40 million in loans, US$5 million in concessional support from GCFF, and US$10.5 million in M-GROW grants, with full disbursement in October 2024. The program supports Moldova’s dual agenda of addressing the fallout of Russia’s invasion of Ukraine—particularly the refugee crisis—and sustaining long-term goals of EU convergence and climate resilience. The operation, closing in June 2026, is structured around three pillars: strengthening resilience of refugees and households, fostering private-sector-led growth, and supporting climate resilience.

Pillar 1 focused on protecting vulnerable households and integrating refugees into the labor market. Measures included strengthening the Ajutor Social program with case management, amending the Labor Code (March 2024) to ease hiring of refugees, youth, and women, and removing restrictions on pregnant women’s employment. These reforms responded to UNHCR findings that employment was a critical need, particularly for female refugees balancing caregiving and work. Refugee employment outcomes improved significantly: by 2024, 50% of registered refugees with ANOFM were employed (47% women), surpassing the 2025 target of 40%. Pillar 1 also addressed energy affordability by reforming the Energy Vulnerability Reduction Fund (EVRF) to improve targeting and introduce monetized benefits, supporting low-income and refugee-hosting households. By the 2024/25 heating season, about 680,000 households received cash benefits, achieving the 2025 target.

Beyond immediate relief, Moldova has pursued structural reforms to strengthen refugee integration. By June 2025, the country hosted 132,852 Ukrainian refugees (57% under temporary protection). A new Law on Asylum, supported by a follow-up DPO in May 2025, aligned Moldova with EU standards by removing the two-year limit on temporary protection, extending access to services, and improving asylum procedures. It also expanded protections for vulnerable groups and established material reception conditions funded from the state budget. These reforms provide refugees with more stable legal status, secure living conditions, and access to employment, laying the foundation for long-term socioeconomic integration and resilience

Relevant Documents:

• • Program Information Document (PID)