Creating well-functioning energy markets in the Republic of Moldova

This paper examines the Republic of Moldova’s transformation of its energy sector in recent years and identifies the remaining barriers to the creation of well-functioning energy markets. Against the backdrop of the energy crisis triggered by Russia’s full-scale invasion of Ukraine and in the context of Moldova’s path towards EU accession, the country has moved rapidly to strengthen energy security, diversify supply routes, expand renewable energy, and deepen integration with European markets. Nevertheless, Moldova continues to face structural challenges: energy markets remain highly concentrated, with limited unbundling, weak regulation, low investment, and a persisting monopoly role played by state-owned enterprises (SOEs), thereby affecting competition, investment, and resilience. The OECD has been supporting Moldova in addressing key reform priorities in the energy sector. This paper provides an accessible overview of recent developments in the electricity and natural gas sectors, and highlights policy options for further strengthening the functioning and resilience of energy markets. It provides a snapshot of the energy landscape and dynamics, identifying the main challenges and exploring the root causes of the underlying market dysfunctions, before delving deeper into corporate governance of SOEs, the reform of which is critical to the creation of well-functioning energy markets.