Since late 2008, Sida finances EBRD Business Advisory Services Programme in Moldova (BAS Moldova)in Moldova. The main objective is that small and medium size enterprises with the help of subsidized consultant services will decrease their energy consumption through energy efficiency. The main goal is that Moldova will be more self-sufficient in the energy sector as well as increased competitiveness among Moldovan enterprises.
Everybody must wear protective clothes before we enter the bakery in the outskirts of Chisinau together with the general manager, Cernea Vitalie. He tells us about the business which started in a small scale just after Moldova’s independence from the Soviet Union. Since then, it has expanded and now also it includes a restaurant, a club, and a shop. The company employs a total of 365 people, of which 260 are women.
The bakery products are very popular and provide some 50 % of the company turnover. When Mr. Cernea noticed that demand for his products increased he started thinking about investing in a new oven in order to increase production and meet market demand. The bakery is situated in a neighbourhood with poor infrastructure and it proved impossible to install the new oven to the weak electricity network. The power supply company suggested that the company invests into a new power station and installs an additional cable to increase capacity, but this proved to be extremely expensive and the plans to expand the business were put on hold.
In September 2010, Cernea initiated cooperation with BAS Moldova to find a solution to the problem. The company had previously been in touch with BAS which also has an active strategy of engaging new companies. BAS is financed by Sweden and helps small and medium sized enterprises with advice, contacts and capital to increase energy efficiency. BAS contributes with a maximum of 10 000 Euros to each consultancy project, but not more than 70 % of the total project cost. Through BAS, Mr. Cernea got in touch with a consultant in energy efficiency who carried out an energy audit and gave advice on energy efficient production solutions.
Despite the fact that the energy audit revealed great potential for energy saving, Mr. Cernea was hesitant to make the necessary investments.
"I didn’t know of anyone who had done similar investments and I was unsure if it would really be profitable. Also, the power supply company wasn’t thrilled about a solution that would mean that I bought less electricity from them, he explains."
After careful consideration and further discussions with BAS, Mr. Cernea decided to take the risk and make the investments necessary for a more efficient energy use. The decision proved to be just right. Energy savings were enough to decrease the annual cost for electricity by 20 % at the same time as he produced app. 30% more pastries. The cost for investments could be repaid within eight months. Due to increased production, Mr. Cernea has also hired another 11 people, mainly women, to work for in his bakery, and he plans to hire more employees within next months to meet expected further increase in demand.
Sweden’s new strategy increases competitiveness in business
Sweden’s support to energy efficiency and market development through BAS is well in line with the overall goal for Sweden’s development cooperation with Moldova: to make Moldova integrated in the European Union.
"The governments in Moldova and in Sweden have both identified energy efficiency for small and medium size enterprises as one of the key issues to increased EU integration and now we’re looking into ways of increasing this part of the portfolio, says Patrik Stålgren who works with energy issues at the Swedish embassy in Chisinau."
Sweden’s cooperation strategy for Moldova covers the period 2011-2014 and focuses on three sectors: democracy, human rights and equality, sustainable urban development and market development. The total annual Swedish budget for Moldova is SEK 110 million.