SDA Moldova continues in the post-Compact period the 2KR Hire-Purchase Program for procurement of irrigation equipment and other farming equipment and machines. Launched in 2015 by the Millennium Challenge Account Moldova, the 2KR Program is a good opportunity for the agricultural producers who cannot take loans because they don’t have collateral or credit history to hire-purchase on-farm equipment. Besides irrigation equipment, agricultural producers may also hire-purchase other farming equipment and machines that will increase the high value agricultural production in the irrigated areas. Beneficiary of the 2KR program may be any agricultural producer who has access to irrigation, including those who operate in the areas of the central irrigation systems rehabilitated with the Compact support.

The 2KR program is implemented by the Implementation Unit of the Increase of the Food Production Project (2KR), which in 2015 received 4.6 million USD from the Millennium Challenge Account Moldova for this purpose.

Eligible Investments:

a) New irrigation equipment or parts of it, necessarily including its design and installation, such as:

• irrigation machines with drums, sprinklers or consoles;
• Irrigation systems with low pressure sprinklers;
• Linear, center-pivot irrigation machines;
• Drip irrigation systems (with lines having a service life of at least 3 years);
• Pump stations;
• Kits of pipes with accessories for local transfer of water for further irrigation of high value crops;
• Fertigation and/or chemigation equipment;
• Components for water accumulation basins;
• Metal or plastic tanks for water storage

b) Provided on-farm irrigation is already available and operational or is being or has already been acquired through the 2KR Hire-Purchase Program, the following categories of new goods are eligible:

• Farming machinery for growing and harvesting fruits and vegetables such as ground mills, mulch machines, precision (pneumatic and mechanical) seeders, machines for arrangement/collection of mulch and drip lines, seedling/planting machines, machines for installation of mini tunnels, sprinklers, plant cutters, mowers, contour cutters, binders;
• Hail protection systems, harvesting platforms, harvesters for fruit, vegetables, nuts, berries and plants in nurseries;
• Greenhouses, solar tunnels and greenhouse related equipment, except related land plots;
• On-farm weather stations.

Program Beneficiaries

The 2KR Hire-Purchase Program is designed to support the provision of Hire-Purchases to agricultural producers, businesses registered under the Moldovan law, with private ownership, as well as peasant farms, individual enterprises, other companies, associations of farmers, entrepreneurship cooperatives, production cooperatives and other companies that are not classified as large enterprises under the Moldovan law.

Eligibility Area

All over Moldova

Financing Principles:

• First-come, first-served;
• Eligible equipment/machinery and beneficiary;
• Compliance with the Moldovan environmental legislation;
• Hire-Purchases may not exceed the MDL equivalent (according to NBM official exchange rate) of USD 100,000 per beneficiary or group of affiliated beneficiaries at the day of clearance by SDA Moldova;
• The beneficiary makes a 25% advance payment of the equipment price;
• 2KR will use money from the Hire-Purchase Revolving Fund to buy the requested equipment and will deliver it to the beneficiary;
• The beneficiary will pay the other 75% of the equipment price in three annual installments;
• No collateral is needed;
• The ownership rights over the irrigation equipment/machines will pass on to the beneficiary only after the former is fully repaid.

The beneficiary must facilitate the monitoring of the equipment/machines procured under the 2KR program by the representatives of SDA Moldova, 2KR or other designees.

Interest Rate

Non-interest bearing transaction

Term

The hire-purchase contract term is 3 years.

Benefits

• No collateral or credit history is needed;
• The advance payment - only 25% of the equipment price;
• The remaining amount to be paid in 3 years;
• Exemption from VAT and customs duties;
• Support and consultancy for investment projects.

Steps to be taken by applicants:

The applicants who have access to irrigation water and are willing to invest in irrigation in order to increase the high value agricultural production will:

• Consult the 2KR experts;
• Download and fill in the Hire-Purchase Application Form;
• Attach the required documents to the application;
• Submit the application package at 2KR office: 18 Calea Basarabiei str., Chișinău mun., tel: +373 22 278463, fax: +373 22 549881, www.2kr.md;
• Bring the requested documents in original and the stamp;
• Together with the 2KR experts decide on the technical specifications of the equipment and select the potential suppliers;
• 2KR will select suppliers through competition of bids and will consider the best value for money;
• If the bid is accepted, sign a protocol of intentions with 2KR;
• Pay 25% of the equipment price in 5 banking days;
• 2KR buys the equipment going through all the legal customs, registration and before delivery insurance procedures;
• Sign the Hire-Purchase Agreement with 2KR;
• Receive the equipment and train the operators;
• After one year pay the first installment, after 2 years – the second installment and after 3 years – the last installment;
• Once the last installment is paid, the ownership rights over the equipment pass on from 2KR to the beneficiary;

In the meantime, the beneficiary uses the equipment, increases the quality and amount of high value agricultural production.