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Summary of proposed guarantee

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.


Project name
RED Union Fenosa S.A.
Project ID
Fiscal year
Guarantee holder
Gas Natural, SDG, SA
Investor country
Host country
Environmental category
Date SPG disclosed
June 20, 2013
Projected Board date
July 30, 2013
Gross exposure
 $190.0 million
Project type
Strategic priority area

Project description

This summary covers an investment by Gas Natural, SDG, SA of Spain in RED Union Fenosa S.A. (RED) in Moldova. The investor has applied for a MIGA guarantee of $190 million for a period of up to five years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.

The project consists of the continued upgrading of the largest electricity distribution company in Moldova, privatized in 2001. Although the company has achieved significant operational and financial improvements, it has continued  to upgrade its distribution network and installations in order to reduce technical and commercial losses. The investor is also further increasing the installations’ safety and security to reduce accidents.

The proposed coverage represents a continuation of MIGA’s previous support to this project.  The World Bank Group’s International Finance Corporation (IFC) has also supported this project with loans.

Environmental Categorization

The project is a category B under MIGA’s Policy on Social and Environmental Sustainability. Click here to view the IFC’s Environmental and Social Review Summary.

Development Impact

The proposed project seeks to support improved living conditions of the population by providing efficient and reliable electricity to households, potable water systems, health clinics, schools, and businesses. Infrastructure and technology improvements are expected to lead to lower carbon dioxide emissions.Additional benefits include direct employment and fiscal revenues.

The proposed project is in line with the World Bank Group’s efforts to support the Moldovan government as it carries out both energy sector reform and investment climate reform aimed at increasing available private finance for investment.

It is also aligned with MIGA’s strategic priorities of supporting investments into countries eligible for concessional lending from the International Development Association.

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