Authorities ready state guarantees for loans for storage batteries
The Ministry of Energy, together with the Ministry of Economic Development and Digitalization and the Organization for Entrepreneurship Development (ODA), is preparing a new loan guarantee instrument for investments in battery energy storage systems (BESS).
Authorities estimate that the mechanism will be approved in early September and claim that it will facilitate investors' access to financing, reduce risks for banks and accelerate the development of the infrastructure necessary to integrate an increasing amount of energy from renewable sources.
The concept of the new financial product was presented during a working meeting attended by representatives of the Ministry of Energy, the Ministry of Economic Development and Digitalization, the Organization for the Development of Entrepreneurship, the Association of Banks of Moldova, commercial banks and experts contracted with the support of the Expertise France technical assistance project.
The meeting analyzed the loan portfolios for renewable energy projects, as well as the main risks and challenges faced by financial institutions in financing them.
The State Secretary of the Ministry of Energy, Carolina Novac, stated that developing storage capacities is a priority for the energy security of the Republic of Moldova.
“As the installed capacity from renewable sources increases, storage systems become indispensable for ensuring the flexibility of the electricity system. The creation of a loan guarantee instrument will reduce risks for the banking sector and encourage private investments in a strategic area for the country’s energy future,” said Carolina Novac.
The banking sector representatives were presented with the concept and main parameters of the guarantee mechanism. According to the Ministry of Energy, the participants appreciated the initiative and agreed on the need to collect additional information from financial institutions to optimally size the product and adapt it to market needs.
After the consultation process is completed and the proposals formulated by the banks are integrated, the product will be submitted for approval to the Organization for the Development of Entrepreneurship, and the authorities estimate that it will be approved in early September.
The Ministry of Energy specifies that the main objective of the new instrument is to facilitate investors' access to financing by reducing the risks assumed by financial institutions and creating the necessary conditions for the accelerated development of electricity storage capacities.
In parallel, the authorities are also analyzing other support measures for investments in BESS systems, including the establishment of state aid mechanisms, the possibility of postponing the payment of VAT on imports for a certain period, as well as eliminating the requirement for a building permit and a zoning plan for storage facilities and renewable energy parks. The purpose of these changes is to reduce administrative deadlines and accelerate the implementation of projects.
According to the ministry, the implementation of the new financial product aims to stimulate private investments in energy infrastructure, increase the flexibility of the electricity system, integrate a greater share of renewable energy, reduce the risks of limiting production from renewable sources, strengthen energy security and reduce the Republic of Moldova's dependence on energy imports.
Data presented by the authorities show that, currently, the approximately 30 storage batteries existing in the Republic of Moldova have a total capacity of 150 MWh, which represents less than 10% of the peak demand. By the end of the year, the storage capacity could increase more than fourfold, following private investments estimated at approximately 150 million euros. Also, the state exempts renewable energy producers who purchase storage batteries from import duties and quickly refunds VAT on their account.
