Weekly Roundup: Energy, Aid and Political Updates
January 31, 2025
Energy Crisis Updates
Since our Wednesday update the ongoing energy crisis has continued to take a series of unpredictable twists and turns. The first technical meeting of the Moldovan and Transnistrian representatives to discuss the EU’s proposed 30 million euro grant ended without agreement.
Under the original proposal announced by Prime Minister Recean, the 30 million euros would be used to supply natural gas to Transnistria. This would be used for heating as well as electricity production at the MGRES power plant and a portion of this electricity would be provided to Moldova1 free of charge.
At the meeting the Moldovan representatives walked this plan back stating that current market prices mean that buying gas to make electricity at MGRES is inefficient. Estimates suggest that given the current prices and the relative inefficiency of the old Soviet power plant, it will cost 200 euros to produce 1 MWh of power. At the same time, 200 euros can buy between 1.5 and 1.7 MWh of power from Romania (where the power plants are more modern). The new proposal was that Energocom purchase power for Transnistria and Moldova with this money while providing a “technical minimum” to MGRES to maintain a load of around 80 MW. Moldova therefore requested technical data from the Transnistrian energy companies about their customers so that they can plan the purchase requirements for both gas and electricity. Specifically, the needs of “household consumers, hospitals, schools and other social centers in the region” - aka not heavy industry.
This change enraged the Transnistrian representatives who accused Chisinau of “seriously interfering” with the original concept and changing the terms of the proposed EU support.
It is worth noting that the financial inefficiency of “round tripping” - aka purchasing gas for Transnistria in exchange for electricity - was already well known and publicly discussed.
Followup meetings saw the Moldovan representatives continue to insist on this new formulation and accuse the Transnistrian authorities of dragging their feet in providing technical customer data for analysis.
Newsmaker wrote to the European Commission for comment on how they viewed the purpose of the 30 million euro grant. On January 30th they replied:
"This package will also allow the resumption of electricity supplies from the Left Bank (the Transnistrian region of Moldova) to the Right Bank of the Dniester. Specifically, Moldova's state energy company Energocom will use this initial aid - 30 million euros - to supply gas to the local Transnistrian gas distributor to ensure uninterrupted energy supplies and to resume electricity supplies from the Left Bank to the Right Bank,"
Shortly after this a followup clarification email followed saying:
"I am getting back to you to clarify what we shared with you earlier today. The information we shared with you reflects the initial emergency assistance package that the Commission offered to the Republic of Moldova on Monday. We were not commenting on the state of play of the ongoing discussions, which have been taking place since the initial offer was made."
Today Prime Minister Recean announced that a final agreement with the EU had been reached on the terms of the support. He announced an agreement where the EU would provide Moldova with a grant of 64 million euros. This new plan blends together the terms of the previous two. 30 million euros will be used to support the February 1 - 10 energy needs of both sides of the Nistru. Of this, 20 million will buy gas for Transnistria which will produce its own electricity and use gas for heating. The other 10 million will be used to purchase electricity for Moldova - whether this will result in reduced prices is now unclear with Prime Minister Recean saying only that this is a first step in that direction. The remaining 34 million euros will be direct budgetary support for Moldova
In theory, this all starts tomorrow. But Transnistria has not yet agreed or provided the requested technical consumer information (and it isn’t clear if they need to anymore).
What Happened?
Once again it we are faced with a confusing set of facts that don’t seem to piece together. The initial proposal, and the way that the European Commission explained this even after Moldova changed tack, involved “round tripping” - aka trading gas for electricity. The Moldovan government says they changed the plan because this is inefficient - but this was known and should not have been news to anyone. Transnistria predictably rejected this because none of this money is theirs (aka they don’t care what is more expensive) and this new situation made them totally dependent on Moldova for deciding how much power they need - and where it would go.
We could read all of this a lot of ways. Was Moldova interested in efficiency or leverage? or both? Did the EU make this proposal understanding that it was a bad use of money but a politically acceptable solution for Transnistria? …and then forget to tell Chisinau that this was the reason? Were Moldova and the EU acting in good faith only to find that Transnistria has zero trust? Should this have been a surprise?
Once again, who knows2. This latest solution accepts Moldova’s efficiency argument and grants Transnistria autonomy on how it allocates resources. Presumably this will be acceptable to Tiraspol but if we find a whole new deal on the table tomorrow it wouldn’t be a surprise.
Updates on the American Foreign Aid Freeze
“[All] communications outside the Agency, including the State Department, must be approved by the Agency Front Office,”
On January 27th all of USAID’s more than 10,000 employees worldwide got an email instructing them to cut off all communications without prior approval. Workers with the agency are not even permitted to communicate with the US Embassies in the countries in which they work. At the same time the Trump administration placed more than 50 top career officials at USAID on leave accusing them of attempting to slow-roll or undermine the total aid freeze and work stop order.
Globally this order caused chaos as partners first tried to understand what was happening and then discovered that no one was going to answer the phones to discuss it. One USAID partner working on HIV/AIDS treatment in developing countries said of the order “It will kill people.” Eventually the realization that critical lifesaving and food support had stopped resulted in Marco Rubio issuing a waiver for lifesaving services - an order that has caused further confusion as it was also non-specific. So far it appears that the State Department is intent on maintaining the freeze for all but the most critical / urgent programs.
In Moldova NGOs with ongoing grants or projects that involved US financing were instructed to “stop work” immediately. If they had money on hand costs incurred from before the order went out can be paid but not after. This means that many partners with active projects faced an immediate cutoff of salaries and other expenses starting this week. Other projects, which require up front spending by organizations with promises to reimburse costs are in limbo and unable to access these resources.
Commenting on the situation, specifically programs directly funding the Moldovan state via infrastructure projects, etc, Prime Minister Recean stated:
"Indeed, there will be a limited impact. I mean both financially and in terms of time. We remain confident that the United States is a reliable partner for Moldova, and Moldova is part of the US strategic interests on the European continent,"
The news caused a flurry of attacks on civil society organizations and NGOs who are already commonly targeted by Russian disinformation and propaganda. As these fights played out on social media local journalists and activists attempted to explain how many critical programs are supported by US funding - from road construction to the provision of community services.
Andrei Nastase praised the aid cutoff calling on the EU to follow America’s lead3. Mr. Usatii also praised the cutoff and attacked the workers of NGOs telling them to get a job and that "I can give you an address where you can get a job as a cleaner in Italy or a strawberry picker in Spain." He was specifically addressing the staff of GenderDocM - Moldova’s leading LGBTQ+ rights organization who lost the majority of their funding this week.
This situation has resulted in a strange kind of debate where arguments are raging but the central actors are quiet, with USAID and the US Embassy not responding to journalist’s requests.
Impact on the Press
The most impacted sector in Moldova by far is the independent press. Newsmaker and ZdG both put out statements detailing the crisis caused by the abrupt stoppage of American programs. Newsmaker states that with their emergency reserve fund and immediate salary reductions they will be able to operate for 3 months without layoffs. ZdG explained that they have lost 40% of their budget due to this freeze. Their statement is worth reading in full as it explains how the free press in Moldova is never out of crisis but that they are determined to keep doing their jobs.
Euractiv has reported that Ukrainian independent media are in a similar position. They quoted Oleh Derenuga, managing director of NikVesti saying:
"This move will lead to a major crisis and upheavals when politicians, oligarchs, and illegal businesses buy up the media,"
The breakdown of income that he described largely mirrors the situation in Moldova. His organization makes 30% of its income from ads and sponsorships and relies on grants for the remaining 70%. Of those who give these grants, the US is by far the largest donor followed rather distantly by the EU.
International Affairs and Security
Here’s a roundup of the top security and international affairs stories of the week:
President Sandu traveled to Kyiv on January 25th at the invitation of President Zelenskyy. On the trip she discussed cooperation on countering Russian hybrid threats with the Ukrainian President and held meetings with the Ukrainian Prime Minister and Speaker of the Verkhovna Rada Ruslan Stefanchuk who thanked Moldova for providing Ukraine with "military, financial, humanitarian and political assistance." Moldovan officials have not commented on what the “military” part of that might mean. She also met with Ukrainian first lady Olena Zelenska who thanked Moldova for supporting Ukrainian refugees. Also in the delegation was Moldovan Foreign Minister Mihai Popșoi who signed an agreement allowing for additional exchanges of teachers and educators between the countries and allowing Ukrainian teachers to teach in Moldovan schools.
Sweden has announced plans to donate to Moldova AT4 anti-tank grenade launchers. The military support is valued at 1.13 million euros and is provided in the context of the ongoing war and Russia’s “repeated attempts to influence the situation in that country [Moldova].” The announcement further stated that “Moldova needs assistance, including military assistance. It is in the interests of Sweden's foreign and security policy to provide Moldova with urgent assistance."
Romanian presidential candidate Călin Georgescu endorsed the partition of Ukraine in a recent interview. In his answer to a question about the outcome of the war he parroted Russian talking points whereby Russia, Romania, Poland and Hungary would all partition Ukraine and acquire their “historical territories4.” He also referred to Ukraine as a “fictional state.”
Pro-Russian politicians in Moldova congratulated Alexander Lukashenko on his “re-election” this week. Specifically, members of the Shor team and Igor Dodon wished the Belarusian dictator well in his new term.
President Sandu attended the 80th anniversary of the liberation of Auschwitz-Birkenau on Holocaust Remembrance Day. While at the event she stated:
"In Auschwitz-Birkenau, I felt the weight of history and our responsibility to the future. I stepped onto the ground where more than a million lives were cut short by hatred and inhumanity. 80 years after the liberation of this horror camp, we must not allow these terrible events to be forgotten or denied. We must promote tolerance, respect and care for our neighbors. Let us build a better world where there is no place for hatred. Today, more than ever, we must be united against hatred and work for peace. This is the legacy that we must pass on to future generations,"
Politics and Justice Reform
Here’s a roundup of the top political stories of the week:
Politicians make predictions and suggestions about when parliamentary elections will be held. Igor Dodon has predicted that the elections will be held on October 5th, the last day allowable by law under the current parliamentary term. Prime Minister Recean recently suggested that elections may be held in September. Renato Usatii stated that he believes that PAS will choose to hold the elections as late as possible - either on September 18th or October 5th. At the same time he suggests that they be held on July 27th in order to give the next government time to come into office before a potential new winter crisis. We currently do not know when a firm date for the election will be announced and it is unlikely that any announcement will be made until the country has put this winter’s crisis behind it.
Irina Vlah has publicly called on the opposition to sign a declaration promising not to form a coalition with PAS after the next elections. She specifically addressed her call to the Socialists, Mr. Usatii and Mayor Ceban’s MAN party. The Socialists quickly agreed, but said that the whole idea should really be considered to be their initiative. Usatii called it an “ugly” PR stunt and called on Vlah to send him a text message next time she wants to talk. And the MAN party refused to clearly respond saying only that "we have our own agenda."
Igor Dodon and the Socialists have announced the start of mass protests that they claim will start in the coming weeks. Mr. Dodon said that the rising energy prices will allow the opposition to come together for protests. He also called on the government to recognize the $700 million dollar debt to GazProm5.
Opposition parties announce the creation of the “Alternative” Block. Socialist presidential candidate Alexandru Stoianoglo, Chisinau Mayor Ion Ceban, Mark Tkachuk and Socialist appointed former prime minister Ion Chicu announced they would be uniting under the new block. Speaking at the announcement Mayor Ceban stated “To avoid interpretations, we advocate European integration as the main goal of the country. We speak and write in Romanian. We know that there is a war in Ukraine. We must focus on the needs of our citizens.”
The Socialists were not invited to join “Alternative?” The organizers were evasive on this point - notable since all of them were either past members of the Socialist party or closely affiliated with them. Igor Dodon welcomed the creation of the block saying “It is important that an alternative is emerging in Moldova in the pro-European segment.”
The preliminary results of the 2024 census have been released. Since 2014 Moldova has seen its population decrease by 388,000 people, or around 14%. This decline is on top of a 17.56% decline in the period 2004 - 2014 and a 7.52% decline between 1989 and 2004. Over the last 10 years every age bracket has seen a decline in population except for people over 65.
Justice Minister Veronica Mihailov-Moraru has presented 3 proposals aimed at strengthening the fight against political and electoral corruption. Under the proposals, prosecutors from the Anti-Corruption Prosecutors Office and Prosecutor's Office for Combating Organized Crime and Special Cases (PCCOCS) would be shifted to the "Department for Combating Corruption and Money Laundering" within the General Prosecutor’s office and tasked with focusing on electoral corruption. Then the Anti-Corruption Prosecutors Office would be merged with PCCOCS to form a single office with 2 departments, one focused on corruption and the other on organized crime. The Minister did not respond to journalists’ questions about what would happen to Anti-Corruption Prosector Dragalin. There has been continuous speculation that part of the purpose of such a merger would be to force the Anti-Corruption prosecutor out half way through her 5 year term. Dragalin’s office put out a statement opposing the proposal saying that “no plausible or convincing arguments were presented in the speech to justify the need for such a merger.”
The crisis at the National Railroad has reached a critical point. The financial situation at the state enterprise continued to deteriorate in 2024 and currently wage arrears for the 4887 employees of the railroad between August and December are in excess of 157 million lei. This week the Federation of Railway Trade Unions announced that if these unpaid wages are not paid in full they will begin a series of protests and strikes starting in February. They note that many workers have not been paid in months and that “Workers can no longer feed their families, pay bills or send their children to school.” Separately, employees of the rail station in Ocnita have notified the railroad that they will resign en-masse if they are not paid in full by February 3rd. In response, the State Property Agency has formed an audit committee to evaluate the railroad’s position and stated that they previously instructed the railroad to cut costs, sell off unused property and prioritize fighting losses - particularly fuel theft. The financial crisis at the company is not new but was temporarily alleviated by a huge spike in traffic in 2022 driven by the war and Russia’s blockade of Ukrainian ports. Since the port of Odesa re-opened in 2023 the railroad has continued to sink into financial ruin.
Disclaimer: As we’ve done before with articles about Transnistria we will sometimes say “Moldova” and “Transnistria” as a way to indicate the parts of Moldovan territory controlled by Chisinau and Tiraspol respectively. This is easier for most readers than “left bank” vs “right bank” and is simply a convenient shorthand. All territory in question is Moldova.
I promise that I don’t. If there was a “throwing hands up in the air in exasperation” emoji it would belong here.
His reasoning was unclear (and at times untrue) and the statement seemed mostly designed as a way to praise Mr. Trump and attack the current government.
If you’re curious what this looks like Dimitry Medvedev previously posed in front of a map of the proposed partition while wearing his Dr. Evil outfit.
It is *really* hard to imagine how this is a popular political position right now. If the Kremlin is forcing its cutouts to publicly call for accepting this debt it badly undercuts their other message of “we will provide you cheap energy.” Dodon’s decision to put this message forward will also probably force other opposition parties to keep some distance from him.