Regulation (EU) 2025/535 of the European Parliament and of the Council of 18 March 2025 establishing the Reform and Growth Facility for the Republic of Moldova

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 212 thereof,

Having regard to the proposal from the European Commission,

Acting in accordance with the ordinary legislative procedure (1),

Whereas:

(1) The Union is founded on the values referred to in Article 2 of the Treaty on the European Union (TEU), which include democracy, the rule of law and respect for human rights. Those values form part of the accession criteria established at the Copenhagen European Council in June 1993 (Copenhagen criteria), which constitute the conditions of eligibility for Union membership.

(2) The Union enlargement process is built on established criteria, fair and rigorous conditionality and the principle of own merits. A firm commitment to ‘fundamentals first’ approach, which requires a strong focus on the rule of law, fundamental rights, the functioning of democratic institutions and public administration reform, as well as on economic criteria, remains essential. Progress depends on implementation by the Republic of Moldova (Moldova) of the necessary reforms to align with the Union acquis.

(3) Russia’s war of aggression against Ukraine further showed that Union enlargement is a geo-strategic investment in peace, security and stability. The Union is fully and unequivocally committed to the Union membership perspective of Moldova. Moldova’s orientation and commitment towards the Union is a strong expression of its strategic choice and place in a community of values. Moldova’s EU path needs to be firmly anchored in tangible and concrete progress on reforms.

(4) It is in the common interest of the Union and Moldova to advance with the reforms to its political, legal and economic systems with a view to its future Union membership and to support its accession process. The prospect of Union membership has a powerful transformative effect, embedding positive democratic, political, economic and societal change and contributes to strengthening Moldova’s resilience.

(5) It is necessary to bring forward some of the advantages of Union membership before accession. Economic convergence is at the heart of those benefits. Currently, the convergence of Moldova in terms of GDP per capita expressed in purchasing power standards remains low at 29 % of the Union average and is not progressing fast enough. Moldova’s diaspora should also be considered as an important contributor to Moldova’s social and economic development.

(6) As accession negotiations with Moldova opened in June 2024, it is important to provide necessary support to Moldova’s accession track. Furthermore, it is important that support be brought to levels that are comparable with other candidate countries engaged in accession negotiations and that commensurate resources are ensured.

(7) The implementation of the Growth Plan for Moldova requires the appropriate funding under a dedicated new financing instrument (the ‘Facility’). The Facility is to assist the country in implementing reforms for sustainable economic growth and advance on the fundamentals of the enlargement process.

(8) Given Russia’s unjust war of aggression against Ukraine, which has profoundly impacted Moldova’s security, economy, and citizens’ livelihoods, as well as the ongoing and unprecedented hybrid attacks targeting the country and its democratic institutions, the Facility should aim to support Moldova in facing significant challenges, in particular as regards economy, energy, food and value chains. It is appropriate for the Facility to provide support to Moldova in a timely manner and to enable Moldova to strengthen its resilience against foreign information manipulation and interference (FIMI) in its sovereignty, democratic processes and institutions.

(9) To achieve the goals of the Growth Plan for Moldova, emphasis with respect to investment areas should be placed on sectors that are likely to function as key multipliers for social and economic development: connectivity, infrastructure, including sustainable transport, decarbonisation, energy, green and digital transitions, agriculture and food industry, rural development, as well as education, labour market participation and skills development, with a particular focus on children and youth and on raising the standard of living throughout the country.

(10) The Facility should build on the Association Agenda with Moldova as well as the work of the Economic and Investment Plan for the Eastern Partnership in Moldova which spearheaded investments in critical sectors such as connectivity, energy efficiency and energy security while avoiding stranded assets, business development, and competitiveness. Enhanced access to the Union single market, through the implementation of the Deep and Comprehensive Free Trade Area, improved infrastructure and participation in Union programmes and policies, subject to Moldova’s alignment with the relevant Union single market rules, will deliver immediate and tangible socio-economic benefits.

(11) Sustainable transport infrastructure is essential to improve connectivity between Moldova and the Union and it should contribute to the integration of Moldova in the Union’s transport network. In the revised trans-European transport network (TEN-T), the Commission extended the Baltic Sea – Black Sea – Aegean Sea European Transport Corridor to Moldova. The TEN-T is the reference for funding sustainable transport infrastructure, including for environmentally friendly means of transport, such as railways as well as digitalisation of transport. Cross-border energy infrastructure projects and interconnections with Member States and Union enlargement partners are essential for regional energy security and integration within the Union.

(12) The Facility should support investments and reforms that promote Moldova’s path to the digital transformation of the economy and society in line with the Union vision for 2030 presented in the Commission communication of 9 March 2021, entitled ‘2030 Digital Compass: the European way for the Digital Decade’, fostering an inclusive digital economy that benefits all citizens. The Facility should strive to facilitate Moldova’s achievement of the general objectives and digital targets with regard to the Union. As outlined by the Commission in its communication of 15 June 2023, entitled ‘Implementation of the 5G cybersecurity Toolbox’, the 5G cybersecurity Toolbox should be the reference for Union funding to ensure security, resilience and the protection of integrity of digital infrastructure projects in the region.

(13) The support under the Facility should be provided to meet general and specific objectives, based on established criteria and with clear payment conditions. Those general and specific objectives should be pursued in a mutually reinforcing manner. The Facility should support the enlargement process by accelerating the alignment with Union values, laws, rules, standards, policies and practices (‘acquis’) with a view to Union membership, accelerate progressive integration of Moldova in the Union single market, and accelerate its socio-economic convergence with the Union. The Facility should also foster good neighbourly relations.

(14) In addition to boosting socio-economic convergence, the Facility should also help accelerate reforms related to the fundamentals of the enlargement process including rule of law, fundamental rights, inter alia, the rights of refugees, of persons belonging to minorities, including national minorities and Roma, as well as the rights of lesbian, gay, bisexual, transgender and intersex (LGBTI) persons. It should also improve the functioning of democratic institutions and public administrations; public procurement, state aid control and public finance management; the fight against all forms of corruption and organised crime; quality education and training as well as employment policies; and the country’s green transition, climate and environmental objectives.

(15) The Facility should help Moldova in its preparation for Union membership in line with the existing enlargement methodology.

(16) The Facility should complement the existing Economic and Financial Dialogue without compromising its scope, thereby enhancing economic integration and preparation for the Union’s multilateral surveillance of economic policies.

(17) The Facility should promote the development effectiveness principles, respecting additionality to and complementarity with the support provided under other Union programmes and instruments and striving to avoid duplication and ensure synergies between assistance under this Regulation and other forms of assistance, including integrated financial packages composed of both export and development financing provided by the Union, the Member States, third countries, multilateral and regional organisations and entities. Moldova’s continued participation in other Union funding programmes is crucial.

(18) In line with the principle of inclusive partnerships, the Commission should strive to ensure that Moldova’s parliament, local authorities, in accordance with Moldova’s national legal framework, and relevant stakeholders in Moldova, including social partners and civil society organisations are duly consulted and have timely access to relevant information to allow them to play a meaningful role during the design and implementation of programmes and the related monitoring processes.

(19) Technical assistance, as well as cross-border cooperation assistance, should be provided in support of the objectives of the Facility and in order to strengthen the relevant capacities of Moldova to implement the Reform Agenda.

(20) The Facility should ensure consistency with, and support for, the general objectives of Union external action as laid down in Article 21 TEU, including respect for fundamental rights as enshrined in the Charter of Fundamental Rights of the European Union. In particular, it should ensure the protection and promotion of human rights, and the rule of law.

(21) The Facility should boost innovation, research and cooperation between academic institutions and industry in support of the green and digital transitions, promoting local industries with a particular emphasis on locally based micro, small and medium-sized enterprises and start-ups.

(22) Moldova should demonstrate a credible commitment to European values, including through its alignment with the Union’s Common Foreign and Security Policy (CFSP), including with Union restrictive measures.

(23) In the implementation of the Facility, account should be taken of the Union’s strategic autonomy as well as of the Union and its Member States’ strategic interests and the values on which the Union is founded.

(24) Activities under the Facility should support progress towards Union social, climate and environmental standards, and support progress towards the United Nations Sustainable Development Goals, the Paris Agreement adopted under the United Nations Framework Convention on Climate Change (the ‘Paris Agreement’), the United Nations Convention on Biological Diversity and the United Nations Convention to Combat Desertification and should not contribute to environmental degradation or cause harm to the environment or climate. Measures funded under the Facility should be in line with Moldova’s National Energy and Climate Plan, its Nationally Determined Contribution and ambition to reach climate neutrality by 2050. The Facility should contribute to the mitigation of climate change and to the ability to adapt to its adverse effects, and foster climate resilience. In particular, funding under the Facility should promote the transition towards a decarbonised, climate-neutral, climate-resilient and circular economy.

(25) The implementation of this Regulation should be guided by the principles of equality and non-discrimination, as elaborated in the Union of Equality strategies. It should promote and advance gender equality and mainstreaming, ensure meaningful participation of women in decision-making processes, and the empowerment of women and girls, and seek to protect and promote the advancement and full enjoyment of all human rights by all women and girls, as well as prevent and combat violence against women and domestic violence, taking into consideration relevant EU Gender Action Plans and relevant Council conclusions and international conventions. Furthermore, this Regulation should be implemented in full respect of the European Pillar of Social Rights, including on child protection and labour rights. The implementation of the Facility should be in line with the United Nations Convention on the Rights of Persons with Disabilities and its protocol and ensure accessibility in its investments and technical assistance, in line with Directive (EU) 2019/882 of the European Parliament and of the Council (2).

(26) Reflecting the European Green Deal as Europe’s sustainable growth strategy and the importance of tackling climate and biodiversity objectives in line with the commitments of the Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission (3), the Facility should contribute to the achievement of an overall target of 30 % of Union budget expenditure supporting climate objectives and 7,5 % in 2024 and 10 % in 2026 and 2027 biodiversity objectives. At least 37 % of the non-repayable financial support, including provisioning, provided to investment projects approved under the Neighbourhood Investment Platform, one of the regional investment platforms referred to in Article 32 of Regulation (EU) 2021/947 of the European Parliament and of the Council (4), should be attributed to climate objectives. That amount should be calculated using the ‘Rio markers’ following the obligation to report the EU’s international climate finance to the OECD, as well as obligations under other international agreements or frameworks. As early as June 2025, the EU climate coefficients, applicable across all programmes under the 2021-2027 Multi-annual Financing Framework (MFF) and set out in the Commission Staff Working Document entitled ‘Climate Mainstreaming Architecture in the 2021-2027 Multiannual Financial Framework’, will also be applied to climate expenditure under the MFF’s Heading 6 (‘Neighbourhood and the world’). The Facility will align with the approach of other Heading 6 instruments, in order to ensure consistent climate reporting in Moldova. The Facility should support activities that fully respect the climate and environmental standards and priorities of the Union and the principle of ‘do no significant harm’.

(27) Projects are approved under the Neighbourhood Investment Platform after assessment by the Commission and subject to a positive opinion by the Member States in the Neighbourhood Investment Platform Board.

(28) The Commission, in cooperation with the Member States and Moldova, should ensure the compliance, coherence, consistency and complementarity, increased transparency and accountability in the delivery of assistance, including by implementing appropriate internal control systems and anti-fraud policies. The support under the Facility should be made available under the preconditions that Moldova upholds and respects effective democratic mechanisms, including a multi-party parliamentary system, free and fair elections, free, independent and pluralistic media, an independent judiciary and the rule of law, and guarantees respect for all human rights obligations, including the rights of persons belonging to minorities.

(29) The Facility should be supported with resources from the Neighbourhood, Development and International Cooperation Instrument – Global Europe (NDICI – Global Europe), primarily from the financial allocation for Neighbourhood East, amounting to EUR 520 million in non-repayable support and a maximum amount of EUR 1 500 million in loans for the period from 2025-2027. The non-repayable support should cover the 9 % provisioning required for the loans corresponding to EUR 135 million, support provided by the Union for projects approved under the Neighbourhood Investment Platform, as referred to in Article 18(2) of this Regulation, and complementary support, including support to civil society organisations and technical assistance. The non-repayable support should be financed from the envelope allocated to the Neighbourhood geographic programme under Article 6(2), point (a), of Regulation (EU) 2021/947. All provisions under Regulation (EU) 2021/947 should apply unless otherwise mentioned in this Regulation.

(30) Decisions on the release of funds referred to in Article 19(3) for the support in the form of loans should be adopted in the period from 1 January 2025 to 30 June 2029. This final date includes the time necessary for the Commission to evaluate the successful fulfilment of the payment conditions concerned and to adopt the subsequent decision on the release of funds.

(31) In order to maximise the leverage of Union financial support to attract additional investment, and to ensure Union control over the expenditure, the investments supporting the Reform Agenda should be implemented through the Neighbourhood Investment Platform. At least 25 % of the loan amount released to Moldova should be made available by Moldova to investment projects approved under the Neighbourhood Investment Platform. This is in addition to the non-repayable support provided by the Union for these projects.

(32) The financial liability from loans under the Facility should not constitute part of the amount of the External Action Guarantee within the meaning of Article 31(4) of Regulation (EU) 2021/947.

(33) Horizontal financial rules adopted by the European Parliament and the Council on the basis of Article 322 of the Treaty on the Functioning of the European Union (TFEU) should apply to this Regulation. Those rules are laid down in Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council (5) (‘the Financial Regulation’) and determine in particular the procedure for establishing and implementing the budget in direct and indirect management through grants, procurement, financial assistance, blending operations and the reimbursement of external experts, and provide for checks on the responsibility of financial actors.

(34) Restrictions on eligibility in award procedures under the Facility should be provided for, where appropriate, given the specific nature of the activity or when the activity affects security or public order.

(35) In order to ensure the efficient implementation of the Facility, including the facilitation of Moldova’s integration in European value chains, all supplies and materials financed and procured under the Facility should originate from Member States, Moldova, candidate countries and contracting parties to the Agreement on the European Economic Area and countries which provide a level of support to Moldova comparable to the one provided by the Union, taking into account the size of their economy, and for which reciprocal access to external assistance in Moldova is established by the Commission, unless the supplies and materials cannot be sourced under reasonable conditions in any of those countries.