E3I Provides Advisory Services to the Ministry of Construction and Regional Development in Moldova

Under contract to the European Bank for Reconstruction and Development, E3I is assisting the Ministry of Construction and Regional Development in Moldova with the Amendment of the Housing Codes Regulating Private Sector Housing Associations of Apartment Owners in order to promote sustainable energy development in the housing sector.  Residential buildings are currently the largest energy end-user in Moldova and consume more than 38% of all final national energy consumption (IEA statistics, 2007), yet offer the potential for 61% reduction in energy consumption. Conservative estimates of investment opportunities to address this energy saving potential are approximately €3.85 billion, with investment opportunities in the urban housing stock estimated at approximately €600 to 700 million.  However, existing housing legislation in Moldova has serious gaps on institutional and legal aspects regarding multi-storey apartment buildings and serves as a hurdle for the provision of financing for energy efficiency in residential buildings. Home Owners Associations (HOAs) are established on a voluntary basis, lack legal empowerment and lack full responsibility over operation. Further, management of the building and decision making procedures are cumbersome and impossible to exercise. In addition legal obligations of HOA are not transferred to shareholders and HOA could disintegrate if more than 50% of residents decide to step out.  This makes it all but impossible for financing institutions to finance HOA and without their involvement complex refurbishment of apartment buildings is impossible. Thus amendment of the Housing Codes is essential to make urban housing stock available for commercial financing. Establishment of effective Housing Legislation by adopting best experience from the EU is a fundamental shift from existing housing legislation in Post-Soviet countries to effective housing model facilitating energy efficiency refurbishment, opening the residential sector for commercial financing and expanding the facilities management market. E3I is under contract to EBRD to review existing legislation in the housing sector, provide comparative gap analysis with the best practices from other CEE countries, identify opportunities for financing refurbishment of multi-storey housing stock as well as make suggestions on how a support programme could be structured. Specifically, E3I:

  • Established housing legislation where HOAs are legally reinforced and bankable non-profit entities, fully responsible for operation and maintenance of their properties, having simple and easy to adopt decision making procedures, compulsory for HOA shareholders;
  • Established supportive regulatory conditions and  expand the market of private facilities management companies to residential buildings;
  • Provided guidance and methodological support to legislative approaches to improving housing legislation in Moldova;
  • Advised the Ministry in amending existing housing legislation; and,
  • Advised the Ministry on the optimal structure of a support programme on rehabilitation of multi-storey apartment buildings, where commercial financing will leverage the minimum direct support provided from national or Donor funding.
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