Weekly Roundup: The Energy Crisis is Over (for now)
February 6, 2025
In our last roundup on January 31st we outlined how Moldova,1 the EU and Transnistria were nearing a deal to end the ongoing energy crisis in Transnistria and to bring prices down in Moldova. That deal was struck and over the subsequent week has so far held.
On February 1st MoldovaGaz started pumping natural gas into the Transnistrian network. At 8:30 am the agreed 3 million cubic meter of gas began flowing and re-pressurized the failing transmission system. Transnistrian “leader” Vadim Krasnoselsky made a statement thanking Ursula von der Leyen for the EU’s help saying:
“The decision to launch European humanitarian gas to our republic has been made. Technical issues are being discussed. This became possible with your participation. Thank you,”
He later also thanked the Moldovan leadership for the fast implementation of the relief plan.
That same day, February 1st, rolling power outages stopped. MGRES began operating on natural gas and thermal heating systems were fired up to start providing heat to apartment blocks. By February 3rd gas was flowing to consumers in apartment blocks and almost all users of central heating were reconnected. Repairs were made to 2 major breaks in the thermal heating system2 and schools, hospitals and public buildings are beginning the process of heating up. Classes resumed already in Bender and the “authorities” hope to resume school in the rest of the region by the end of the week. Private houses are the slowest to reconnect to gas since workers must turn them on one by one. The plan is to reconnect the roughly 70,000 private homes to gas by the end of the week.
EU Officials Announce Major Energy Support Package
European Commissioner for Enlargement and European Neighbourhood Policy Marta Cos visited Chisinau this week and signed an agreement with Prime Minister Recean on a major financial assistance package for Moldova. The package allocates 310 million euros for Moldova in 2025 to support the country’s energy independence and integration with EU energy market. From this amount 60 million euros will be provided to Transnistria to cover 70% of their social energy consumption through April. This money is subject to the region meeting the following conditions:
Tiraspol will discuss with Chisinau ways to respect human rights and fundamental freedoms in the region
Energy prices will gradually be brought up to market rates for household consumers
Large exporters / energy intensive businesses will pay for energy at market rates and will be excluded from the support program
The Transnistrian “authorities” have not yet commented on these conditions publicly or to the Reintegration Bureau.
Prime Minister Recean said this of the support:
"The Kremlin has created a humanitarian problem, and now European partners are ready to solve it. The package proposed by the EU will allow us to continue paying compensation, avoid a humanitarian crisis and invest in Moldova's energy security. When false friends turn off the gas, real European friends open their arms and start helping. We will continue working together with our partners in the European Union to ensure the full independence of the entire country from blackmail with Russian gas,"
Of the funds allocated to support Moldova, 151 million euros will be used for paying energy compensation (subsidies) for the entire population. 15 million will support subsidies for agri-business and some industry and 20 million will support energy for schools, kindergartens, hospitals and other public buildings. An additional 50 million will support energy efficiency investments.
The greatest short term impact will be felt in the household compensation scheme. Up until now households had to apply with the government and would have some portion of their bills refunded each month based on a combination of eligibility criteria. Under the new system all household consumers in Moldova will pay for their first 110 kWhs of electricity at the same rate as December 2024 utility prices. Any additional consumption will be billed at the new, higher, rates.
Businesses have been able to apply online for compensation since February 3rd through EVO or M-Cabinet.
A Series of “Firsts” in the Transnistria Relationship
On February 3rd and 4th representatives of Moldova’s Ministry of Energy, Energocom, MoldElectrica and Bureau of Reintegration visited major industrial sites in Transnistria to inspect them for compliance with the EU’s conditions. No Moldovan government representatives have ever officially inspected these facilities in the past.
On February 4th an additional “first” happened when Transnistrian broadcasters started airing Moldova 1 state news channel and a Romanian language sports channel. This is the first time in 30 years that Transnistrian viewers have been able to view any Romanian language content, or any content at all produced in Moldova.
The only broadcaster in the region is the unlicensed monopoly Interdnestrcom which is reported to be owned by Sheriff.
At the same time as these unprecedented new connections over the river, the Transnistrian “parliament” has proposed a new law levying criminal penalties for collecting, sorting or transferring personal or classified information to “foreign citizens.” The law envisions fines of between $1800 and $2700 and up to 8 years in prison. What information this governs is vague, leading to fears that it could criminalize various types of speech and the activities of Moldovan journalists. The Reintegration Bureau has condemned this legislative initiative and demanded that it be withdrawn.
Political Updates
Here is a roundup of the top political stories of the last week:
Understanding the “Alternative” Block. Last week’s announcement of the new Alternative Block of opposition parties has shaken up assumptions about the upcoming parliamentary elections. Ion Ceban (MAN), Ion Chicu (PDCM), Mark Tkachuk (Civic Congress) and Alexandru Stoianoglo (“Independent”) choosing to unite under a common banner has brought together 4 of the most prominent of the so called “pseudo Europeans." All 4 men were previously pro-Russian political figures who now profess to be pro-European. Addressing this topic head on Mr. Ceban stated that "in order to exclude interpretations" … "we speak and write in Romanian and we know that there is a war in Ukraine." Commentators were not convinced and political scientist Angela Kolacki told Newsmaker that this combination has virtually eliminated the possibility of MAN seeking a coalition with PAS in the new parliament. Various commentators have suggested that this block may pull more voters away from the Socialists than from PAS, but is likely targeted at finding the most disaffected voters from across the spectrum. Most assume that Ceban will be the defacto leader of this block noting that even the name “Alternative” comes from his own MAN Party - the National Alternative Movement.
All USAID Employees are being placed on administrative leave and recalled to the United States. The agency’s website, which had simply vanished over the weekend, came back to life this week with this short announcement. All staff will be on leave starting Friday and a target has been set of recalling them in 30 days. This will create enormous disruption to people’s lives as kids are pulled out of schools, houses packed up and families suddenly return to the US - often with nowhere to live. It will also substantially reduce the American diplomatic footprint in Moldova.
Igor Dodon went to Moscow and came back with “thoughts.” Mr. Dodon gave a press conference after returning from a trip to Moscow and he had a lot to say. In it he laid out a declaration of principles and positions for the Socialist Party. Many of these were old talking points - Moldova is a neutral country, the national language is “Moldovan,” the country should ban LGBTQ “propaganda,” etc. At the same time there were also some new points. Here is a selection of quotes from his press conference:
On Transnistria:
“This crisis has shown that the time has come to unite the two banks of the Dniester. We need to reintegrate the country. Transnistria will not survive without Moldova, and the first month of 2025 has shown this.”
On the War in Ukraine:
“We need a call for peace, negotiations, not war. (…) We all hope that the efforts of Trump and Putin will yield results in the near future."
On territorial expansion:
"I would like to make a remark to some politicians of the European Union, Romania and others who are already dividing the lands of Ukraine. Firstly, the lands that you name, some of them are historically Moldovan.”
On NGO’s and the dissolution of USAID
“…we demand that the new US authorities conduct an audit and investigation into the process of taking control of the justice sector in Moldova by foreign NGOs. (…) A law on regulating the activities of NGOs is also needed.”
There’s a lot to unpack there. There is a clear indication of support for Trump’s plans for Ukraine as well as the withdrawal of American foreign aid from Moldova. A law “regulating the activities of NGOs” clearly refers to a Russian style “foreign agent’s” law meant to suppress civil society groups. His apparent claims to part of Ukraine’s territory also echo Russian proposals to partition Ukraine but rejects Romanian presidential candidate Călin Georgescu’s assertions that parts of historical Bessarabia are really Romanian. The most interesting aspect might be the language of reintegrating Transnistria and may indicate that the Kremlin does intend to force reunification. We’ll return to this topic as various opposition parties begin to hone their messaging in an election year.
Alexandr Stoianoglo parrots Elon Musk as he attacks NGOs and the media. The former presidential candidate stated that “Now that the US is revealing USAID's methods and global networks of influence” Moldova should create a vetting procedure to establish the real motives behind NGOs and the independent press that he says has“purged any dissent.” These statements come on the heels of hundreds of X posts by Musk attacking USAID and claiming that it is part of a global left-wing conspiracy.
The government has proposed a bill aimed at speeding up the construction of a new US Embassy. The bill would recognize the construction of the embassy on the territory of the former Republican Stadium as a “public benefit” project in the “national interest.” This would speed up the process of expropriating private businesses located on the territory. The current owners would be compensated by the state for the property, an expense that has not currently been budgeted for, and reimbursed by the US government. The process of building a new embassy has been slowly progressing for years with numerous legal impediments and protest movements opposing it. Evidently the government has decided to speed that process up now and this bill is designed to cut through the remaining red tape.
Israel has opened its embassy in Chisinau. Israeli Foreign Minister Gideon Saar traveled to Chisinau for the occasion and spoke about his grandfather who was born in Chisinau before emigrating to Argentina. In his comments he somewhat cryptically stated that the Israeli Ministry of Justice had finished its review of Moldova’s request to extradite Ilan Shor but that the point is moot because he "does not come there anymore" and that this is "not a coincidence." He did not overtly say that Israel would extradite the fugitive oligarch if it had the chance. Ilan Shor quickly put out a statement stating that he has visited Israel multiple times since the recent Moldovan elections and that he can “come to Israel at any time.”
Ion Chicu does not know what he thinks about USAID. On February 3rd the former Prime Minister and new member of the Alternative Block put out a statement on Facebook stating that “The US Embassy in Moldova does not want to comment on Musk's statement that USAID is a criminal organization? USAID finances criminals in our country, and that's a fact!" On February 4th he put out another statement calling on people not to “succumb to this scandal” (aka the attacks against USAID by Musk and pro-Russian figures online) and to “be grateful to the American people who financed these projects in Moldova.”
Court cases into the illicit financing of the Shor Party are progressing. This week the court heard evidence of Bashkan Gutsul crossing the border 24 times since 2019, often only exiting the country for 24 hours, and trafficking back money. Prosecutors allege that in 2019 she was an (unofficial) employee of the "monitoring and control" department of the Shor Party and presented evidence from her seized phone showing how she coordinated illicit payments to party members and maintained records of paid protests. The defense claims that the prosecution lacks “specific evidence.”
The National Bank has raised the base rate from 5.6% to 6.5%. This rate hike comes on the heels of a the decision to raise the rate from 3.6% to 5.6% in January. The National Bank explained the hike as a move to curb inflation which has been growing through the winter due to increased energy prices.
Did you ever wonder what healthcare in Moldova is like? Due to some particularly silly circumstances I broke each of my feet in exactly the same way almost exactly 10 years apart - one in the US and one in Moldova. I share the story of my falls and stumbles as well as my comparative thoughts on the two healthcare systems in my new Substack “Out of Place, Out of Context:”
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.
In terms of long term damage both sides of the river got very lucky with the warm weather this winter. If temperatures had fallen and maintained levels well below zero, like a normal year, then more thermal pipes and household pipes would likely have burst. Global warming has worked in Moldova’s favor this winter.