On Tuesday, the European Parliament approved a new support initiative for Moldova known as the Reform and Growth Facility, designed to provide enhanced financing and democratic oversight for the country.

The provisional agreement, reached between Parliament and Council negotiators on 19 February 2025, focuses on addressing the significant challenges Moldova faces due to the ongoing impact of Russia's aggression in Ukraine.

The Facility will allocate a total of €1.885 billion between 2025 and 2027, comprising €520 million in grants and up to €1.5 billion in low-interest loans.

This financing is aimed at assisting Moldova in mitigating the socio-economic repercussions of the war in Ukraine, enhancing its energy security, and fortifying its democratic processes against external interference.

Key elements secured in the negotiations include an increase in grant-based support, with negotiators agreeing to elevate the grant allocation by €100 million to a total of €520 million.

The overall support will now include an 18% pre-financing provision, marking an increase from the originally proposed 7%.

This augmented pre-financing is expected to facilitate rapid access to resources necessary for public service modernization and anti-corruption measures.

Furthermore, 20% of the grant funds will be dedicated to strengthening Moldova’s institutional frameworks.

This includes investments in digital governance, civil service training, and judicial reforms, all essential for effective financial management.

The agreement also establishes an oversight framework that ensures the European Parliament can regularly review the implementation progress in collaboration with the European Commission.

The approved Facility allows for the possibility of voluntary contributions from other international donors, aimed at providing additional support to Moldova.

Importantly, the jurisdiction of the Facility explicitly prohibits funding any activities that might undermine the sovereignty or territorial integrity of Moldova.

The European Parliament's support came with a decisive vote of 499 in favor, 117 against, and 44 abstentions.

The initiative has been characterized by European lawmakers as a crucial step in reinforcing Moldova’s EU candidacy and assisting in essential reform efforts.

Following the approval by the European Parliament, the provisional agreement awaits ratification by the Council.

Once the Council also gives its approval, the Facility will officially enter into force, pending publication in the EU's official journal.

The Reform and Growth Facility is seen as a vital part of the wider EU Growth Plan for Moldova, which aims to stimulate economic growth and foster socio-economic stability in the country over the next decade.

This move aligns with similar support frameworks established for other EU candidate regions, such as the Western Balkans Facility, marking a substantial advancement in Moldova's pathway toward EU membership.