World Bank Approves US $20 Million in Additional Financing for Moldova’s Social Investment Fund II Project

The World Bank Board of Directors today approved an additional financing credit to the Republic of Moldova in the amount of US $20 million for the Social Investment Fund II Project. The additional financing will complement the total credit of US $40 million, allocated under Phase I and II of the project, and will be used to contribute to employment and wage incomes in selected poor communities during the current economic contraction and during the recovery.

To date, the Moldova Social Investment Fund Project (MSIF I and II) has assisted over 700 localities in addressing local development needs. It has provided access to natural gas and funded major improvements in roads, schools, kindergartens, cultural centers and other social institutions across Moldova.

 “The Social Investment Fund Project has been one of Moldova’s greatest development successes,” said Melanie Marlett, World Bank Country Manager for Moldova. “It has empowered poor communities and vulnerable populations across the country to take a role in managing their development needs, strengthened their sense of ownership of success and helped them sustain it through strong monitoring and accountability mechanisms. Building on the earlier results of the project, the World Bank is pleased to be scaling up financing to create new job opportunities and provide an income to address the impact of the current economic crisis on Moldova’s rural population.”

The US $20 million will be directed towards scaling-up the community development component, and most importantly, it will increase the labor-intensiveness of works, and deliver as much employment as possible in 2010 and 2011, when economic conditions are likely to be weak. In March 2009, the World Bank Board of Directors approved US $5 million to support the rehabilitation of community infrastructure, with a preference for villages damaged by floods in the summer of 2008, particularly along the Prut and Nistru Rivers.

The Moldova Social Investment Fund II Project was launched in September 2004. The project’s objectives are to:

• enhance the capacities of local government in organizing provision of improved priority basic services in partnership with civil society (community development component);
• enhance the capacities of central and local government in the development of a coordinated network of integrated social care services at rayon level in partnership with civil society (social care services development component); and
• develop an institutional mechanism to reflect community experiences and influence national policies (capacity development, monitoring and evaluation component).