Report on the welfare impact of energy compensations in Moldova in 2021–2025

Based on the previous UNDP study, this report updates and expands the analysis of the welfare impact of Moldova’s Energy Vulnerability Reduction Fund (EVRF), incorporating new data, improved methodologies, and an assessment of the 2024–2025 heating season. Using the latest data from the 2024 Household Budget Survey and the Energy Vulnerability Information System, the study evaluates the impact of both on-bill and cash-based compensations on household welfare.

The findings confirm that energy compensations have significantly reduced both energy and monetary poverty in Moldova, even amid rising energy prices. During the 2022–2025 heating seasons, the national energy poverty rate registered a significant decline, accompanied by notable reductions in both absolute and food poverty. The policy proved especially effective for vulnerable groups such as women-led households, the older people, and Ukrainian refugees.

The study recommends improving targeting mechanisms, integrating energy efficiency measures and aligning short-term assistance with long-term social protection reforms. These steps would strengthen the EVRF’s contribution to poverty reduction, enhance household resilience and advance Moldova’s alignment with EU standards for inclusive and sustainable social protection.

In September 2022, the Government of Moldova, with support from UNDP, designed and launched the Energy Vulnerability Reduction Fund (EVRF) as an evidence-based compensation scheme aimed at minimizing the negative impact of energy price inflation on households to address the urgent energy crisis. The EVRF provides targeted compensation to energy-poor and vulnerable households for increases in centralized heating, natural gas, and electricity tariffs, with the overarching goal of reducing vulnerability, preventing households from falling into energy poverty, and strengthening their resilience to future energy shocks