The Rural Business Development Programme (IFAD III)

IFAD III. The Rural Business Development Programme , the third IFAD-investment in the Republic Moldova, has been launched in July 2006 and is expected to be finalised in September 2011. For Programe implementation shall be allocated cca. USD 13,5 mln.

At the same time, under the Programme has been established the Revolving Fund, proceeds of which are being used for the continuous on-lending to further finance eligible activities.

The programme’s objective is to stimulate the growth of strategic farming and rural business activities in Moldova .

The Project is national in scope and is being implemented throughout rural areas of the Republic of Moldova under the Government’s control, including the Autonomous Territorial Entity Gagauzia, except for Chisinau and Balti cities.

The Programme consists of the following components:

  • The Rural Financial Services;
  • The Rural Enterprise Intermediation Services;
  • The Competitive grants for development of the Market-Derived Infrastructure Component.

The Rural Financial Services Component. Aimed to mainstream rural financial services to investment projects with the enhanced economic impact, the positive effect being deducted from the value chain, and not from the specific character of business itself. To measure the investment project impact the Value Chain Multiplier Index (VCMI) shall be calculated.

The Rural Financial Services beneficiaries shall be self determined by application of the Value Chain Multiplier Index (VCMI) and by meeting the set up threshold that is calculated by the CPIU-IFAD, periodically revised and adjusted by the IPSC and approved by the IFAD.

The Beneficiaries of the Rural Financial Services are:

Rural-based privately owned enterprises of any legal status meeting the following criteria:

  • Are being registered based on legislation in force of the Republic of Moldova , totally private, without state and/or foreign capital;
  • Maintain accounting evidence, prepare and submit on timely basis standard financial records ;
  • Meet the Value Chain Multiplier Index (VCMI) threshold accepted under the Programme;
  • Comply with normative acts and standards with regard to maintaining of sound environmental practices and principles on impact evaluation thereof;
  • Shall participate in co-financing of the proposed project with own contribution estimated in cash or assets with at least 20% of the total investment cost.

Eligible activities for financing :

  • Plantation of perennial plantation (vineyards and orchards) ;
  • production, processing, packing of agri-products;
  • collection /cold storage of agri-products (cold storage facilities);
  • Production of seeds and seedlings, production of early vegetables in greeneries;
  • Procurement of agricultural machinery / irrigation systems;
  • Livestock and poultry production;
  • Other types of agricultural activities.

Priority for financing shall be given to those business activities creating new jobs and generating incomes for rural population, as well as activities that would generate the highest VCMI level.

Non-eligible activities

  • Refinancing of the existing debt;
  • Tax payment;
  • Living Houses construction;
  • Procurement or lease of land;
  • Production of strong beverages;
  • Procurement of pesticides;
  • Commercialising of consumer’s goods and strong beverages;
  • Gambling games, Recreation centres, restaurants, bars;
  • Commerce, repair and precious metal jewellery pawning ;
  • Microbus/ passengers transportation services.