Describes how major projects are secured and financed. Explains activities of the multilateral development banks in and other aid-funded projects.
Selling to the Government
Virtually all Moldovan governmental agencies can conduct procurements. All important acquisitions technically require competitive bidding with strict formal requirements that limit the extent of sole sourcing. Public procurement procedures are overseen by the Public Procurement Agency. The Agency publishes procurement announcements in an electronic bulletin that can be accessed online.
Since 2012, businesses have access to an electronic procurement system. Virtually all procurements are conducted online through the MTender at platform at http://www.mtender.gov.md/developed with the support of EBRD and local IT companies. The e-platform for public procurement makes it easier for anyone interested to have access to public procurement notices and tender documentation. First tested for small procurements, the platform was extended to encompass the entire range of procurements organized by public authorities.
The 2016 Law on Public Procurements aligned Moldovan governmental practices with the EU practices in accordance with the Moldova-EU Association Agreement and the WTO Agreement on Government Procurement.
Some domestic and foreign organizations have criticized Moldova’s public procurement practices for insufficient transparency. The time allowed for preparing bids after the announcement of a tender is frequently short and documentation requirements, including translation into Romanian, can be onerous for companies not based in Moldova. Also, budgetary constraints often limit the local government’s purchasing power. Internationally financed public procurements are usually the most transparent and provide the best opportunities for U.S. companies. International tenders organized by the World Bank, European Bank for Reconstruction and Development (EBRD), and other international organizations represent good opportunities.
U.S. companies bidding on Government tenders may also qualify for U.S. Government advocacy. A unit of the U.S. Commerce Department’s International Trade Administration, the Advocacy Center coordinates U.S. Government interagency advocacy efforts on behalf of U.S. exporters bidding on public sector contracts with international governments and government agencies. The Advocacy Center works closely with our network of the U.S. Commercial Service worldwide and inter-agency partners to ensure that exporters of U.S. products and services have the best possible chance of winning government contracts. Advocacy assistance can take many forms but often involves the U.S. Embassy or other U.S. Government agencies expressing support for the U.S. bidders directly to the foreign government. Consult Advocacy for Foreign Government Contracts for additional information.
Financing of Projects
Moldova lacks a developed capital market. Banks are the only domestic source of project financing. However, interest rates are high, while the bulk of financing from banks is short-term. Given the relatively small size of Moldova’s financing sector, a single bank may find itself under a great deal of pressure to provide lending for large projects.
Project financing is very limited unless implemented through subsidized loan programs that are funded by foreign governments and multilateral financial institutions, and are aimed at private business development. Therefore, the role of international financial institutions such as the World Bank Group (International Bank for Reconstruction and Development IBRD, International Finance Corporation IFC and Multilateral Investment Guarantee Agency MIGA), the European Bank for Reconstruction and Development EBRD, and the European Investment Bank EIB to finance large projects is very important.
Multilateral Development Banks and Financing Government Sales. Price, payment terms, and financing can be a significant factor in winning a government contract. Many governments finance public works projects through borrowing from the Multilateral Development Banks (MDB). A helpful guide for working with the MDBs is the Trade Finance Guide. The U.S. Department of Commerce’s (USDOC) International Trade Administration (ITA) has a Foreign Commercial Service Officer stationed at each of the five different Multilateral Development Banks (MDBs): the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the World Bank.
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