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News 09 Jun 17

Moldova Energy Deal Raises Concerns of Russian Pressure

A new deal signed quietly by the government in Chisinau with the Russian operator of a power plant in Moldovan breakaway region Transnistria has worried EU observers and the Moldovan opposition.

Ana Maria Touma
The power plant in Cuciurgan operated by Russia's Inter Rao. Photo:Dodor/Wikimedia Commons.

A sudden decision taken by Moldova’s Ministry of Energy to modify a recent energy contract awarded through a public tender to a Ukrainian company and introduce a new clause allowing the government to buy electricity from a Russian-owned plant in the breakaway region of Transnistria has raised concerns over lack of transparency of the government in Chisinau and its vulnerability to Russian pressure.

The initial deal was signed at the end of March by Moldova’s pro-European government to buy electricity from Ukrainian DTEK Trading, owned by Ukrainian billionaire Rinat Ahmetov.

The deal replaced its usual provider, the Russian Inter Rao-operated plant located in Transnistria.

The Moldovan government said the Ukrainian provider had offered a better price at the public tender than the Inter Rao power plant in Cuciurgan, Transnistria.

The decision was interpreted as a political move in Tiraspol, capital of the separatist region, where the government stood to lose $100 million per year, the price Moldova paid for electricity provided by the plant in Cuciurgan, Transnistria’s main contributor to the economy.

However, two months later, the Moldovan government mysteriously changed its mind and decided to buy 70 per cent of Moldova’s electricity from Inter Rao.

The Russian company disclosed the deal to the Russian media, but only after lack of transparency accusations from the media and opposition politicians, Energocom, Moldova’s state-owned energy distributor, explained that new negotiations had taken place and Inter Rao offered a better price than the Ukrainian company.

The EU Delegation to Moldova and the EU High Level Adviser for Energy Policy, who had taken part in the March tender, asked the Moldovan government for explanations, expressing concern that there was unfair competition and the Ministry of Energy was too involved in the tender.

Transnistrian leader Vadim Krasnosselsky, however, explained what had happened on Thursday, in press briefing.

The “problem was solved” due to Russian Deputy PM Dmitry Rogozin, who is also Russian President Vladimir Putin’s special envoy for Transnistria, Krasnosselsky said.

Krasnosselsky came back from a Moscow visit on Wednesday and admitted during a press briefing that he asked Rogozin himself to intervene and pressure Moldova into buying from Cuciurgan again.

“I thanked Dmitry Olegovich Rogozin for his great contribution to the restoration of a contract between MGRES [the plant in Cuciurgan] and Moldova. When in March the contract was disrupted, all the information was sent to the special representative of the Russian president for Transnistria, and we asked him to do something about it, to find a solution. The solution was found,” he said.

The solution was that the Russian group simply gave Moldova a 10 per cent discount, a percentage that an offshore intermediary based in Cyprus used to cash.

It wasn’t immediately clear who the offshore belonged to and why an intermediary was necessary in the transaction.

Moldova’s President Igor Dodon confirmed that Rogozin’s direct negotiations with the Moldovan government were vital to lowering the price.

After the public tender in March and the establishment of a joint Moldovan-Ukrainian border control in Cuciurgan, in the separatists’ territory, Tiraspol complained in Moscow that the government in Chisinau was trying to impose a blockade and kill the regional economy.

The Russian state Duma on Thursday called on Ukraine and Moldova to stop the joint border control on Transnistrian territory. 

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