WINE SECTOR RESTRUCTURING PROGRAM FILIERE DU VIN FOR PERIOD APRIL 01 JUNE 30, 2013

Transcription

1 Ministry of Agriculture and Food Industry of the Republic of Moldova Consolidated Unit for Implementing and Monitoring the Wine Sector Restructuring Program WINE SECTOR RESTRUCTURING PROGRAM FILIERE DU VIN FOR PERIOD APRIL 01 JUNE 30, 2013 Date of submission to EIB: July 2013 The contents of this publication are the sole responsibility of Consolidated Unit for Implementing and Monitoring the Wine Sector Restructuring Program and can in no way be taken to reflect the views of the European Union. 1

2 The information contained herein in this report was sent to the EIB under the responsibility of: Company Consolidated Unit for Implementing and Monitoring the Wine Sector Restructuring Program (PIU) Contact person Title Address Iurie BRUMAREL Executive Director of Moldovan Wine Sector Restructuring Program 18, Calea Basarabiei str.,2 nd floor, Chisinau, Republic of Moldova, MD-2023 Contact Phones Cell: Office: s iurie.brumarel@winemoldova.md iurie.brumarel@yahoo.com ucimprsvv@yahoo.com

3 Table of Contents INTRODUCTION... 5 PROGRAM PERFORMANCE EVOLUTION... 6 A. CREDIT LINE INSTRUMENT... 9 B. LEASING INSTRUMENT C. PROMOTE QUALITY CONTROL BODIES, EDUCATION AND RESEARCH D. PROGRAM MANAGEMENT COMPONENT Management Information System elaboration Monitoring activity Reporting and Budgeting Procurement activities Program PR actions Annex 1. Total Project Costs for the Project - Cumulative Data (in EUR) Annex 2 Sub-sector distribution of EIB Allocations Annex 3. Total Allocated amount by EIB for the Project - Cumulative Data in Annex 4. Planned activities for the III quarter Annex 5. M&E Monitoring visit Tomai Vinex Annex 6. M&E Monitoring visit Bravo Wine Annex 7. M&E Educational Institutions visits Annex 8. M&E Monitoring visit First Line" Annex 9. M&E Monitoring visit Vinăria Zîmbreni" Annex 10. M&E Monitoring visit "Fautor "LLC

4 Abbreviations CLD CEED II ECCYSA EIB EUR FB GRM LPAs LLC M&E MIS MoAFI MoF MDL OM PB PDO PED PFI PGI PIU TA USAID WSRP Credit Line Directorate Competitiveness Enhancement and Enterprise Development II Entidad de Promoción, Certificación y Servicios Agroalimentarios European Investment Bank EU currency Final Beneficiary Government of Republic of Moldova Local Public Authorities Limited Liability Company Monitoring and Evaluation Management Information System Ministry of Agriculture and Food Industry Ministry of Finance Moldovan Lei Operations Manual of the Program Potential Beneficiary Protected Designation of Origin Program Executive Director Participating Financial Institution Protected Geographical Indication Program Implementation Unit Technical Assistance United States Agency for International Development Wine Sector Restructuring Program

5 INTRODUCTION The Wine Sector Restructuring Program (WSRP) has been launched on the 23rd of November, 2010 and is expected to be finalized on the 31 st of March From EIB sources EUR 75 million has been allocated for the implementation of activities envisaged under the Program being operational for almost 4 years. The WSRP aims to contribute to wine sector recovery and develop the production of bottled wines of Protected Designation of Origin (PDO) and/or Protected Geographical Indication (PGI), by (i) restructuring the wine industry, (ii) improving the quality and consistency of wine produced in Moldova from the quality of vineyards to the final packaging and dispatch of products, and (iii) diversifying the country s export markets. In order to achieve the Program s goal and objectives Program Implementation Unit (PIU) will act through 5 Program components: i. Winemaking enterprises development - upgrade the equipment and facilities, establish new winemaking enterprises, or expand the activities of the existing ones; ii. Viticulture sector development - restructure and revitalize the old and un-productive vineyards, introduce new growing technologies (drip irrigation, other protection systems) and upgrade the viticulture equipment at the farm level; iii. Associated industries enterprises development - upgrade the equipment and facilities; iv. Promote quality control bodies, education and research - acting through: a. National Laboratories Network Development establishment / development of the relevant control bodies and testing wine quality at national level; b. Promotion of pro-wine policies and institutions support the introduction of the system of PDO and PGI for Moldovan wines; organize trainings for students; create working laboratories or update the equipment in the existing laboratories in four affiliated educational institutions. v. Program management PIU operations undertaken for the Program implementation. The Program Components will be financed through four financial instruments, which are the Credit line, Leasing, Loan guarantees, and Capital investments. 5

6 This Report has been elaborated by the PIU in accordance with Article 12.06, Schedule A (Reporting), point 3 of the Finance Contract Serapis , and reflects the evolution of Program s performance during the reporting second quarter of PROGRAM PERFORMANCE EVOLUTION In the reported period, PIU activities were based on continuing implementing and developing the Credit Line and Leasing financial instruments, as well as persist working with MoAFI and regional winemaking and viticulture association s representatives, in order to agree and consolidate all proposals for the second phase of the Technical Assistance of the Program and to launch financing of laboratories, training, education component of the Program. The total amount of expenditures related to all activities implemented under the Programme till June 30, 2013 represent 34,152, EUR, including 15,838, EUR has approved from the EIB loan and 17,869, EUR is beneficiaries co-financing amount, 425, EUR is financing obtained from the Republic of Moldova Government and 18,400,00 from Italian Grant, as indicated in the table below: Table 1. Total Program cumulative budget as of , EUR (Cumulative data as of ( ) Program Component Component 1: Winemaking enterprises development Component 2: Viticulture enterprises development Component 3: Associated industries enterprises development Component 4: For laboratories, training, education and development of food security Requested loan amount from EIB sources Beneficiaries co-financing GRM Italian Grant Total Weight, % , , ,5 74% , , ,7 17% , , ,4 7% % Program Management % Total , , ,6 100%

7 The below diagram shows the structure of requested loan from EIB and beneficiaries co-financing: During second quarter 2013 PIU worked with several potential beneficiaries of the Program from winemaking sub-sector, viticulture sub-sector, supported industries and education institutions as presented below: Table 3. Information regarding sub-projects amount on final beneficiaries per components of the Program, which were approved by EIB during the second quarter 2013, Eur Sub-sector Total amount of sub-project Value of EIB loan approved amount Value of FB co financing Component 1: Winemaking enterprises development Component 2: Viticulture enterprises development Component 3: Associated industries enterprises development Component 4: For laboratories, training, education and development of food security TOTAL

8 During the reported period through the Credit Line, PIU registered 4 Applications from Potential Beneficiary, as well as provided assistance in the development of 6 business plans for winemaking, viticulture and support industries companies and 3 investment project for Education Institutions, issued PIU eligibility notice for 6 sub-projects. Table 4. Summary performance on Credit Line Component as of Consulted Registered Developed PIU PFI / CLD EIB NO EIB PB applications Business Plans eligibility approval Objection financed notice Cumulative as of During During I quarter II quarter from which Education Institutions For defining the Leasing instrument PIU finalised the elaboration of the Operations Manual Annex D Leasing Instrument, including procedures/ templates/ documents for leasing operations.

9 A. Credit Line Instrument During the reported period of time through this instrument to Final Beneficiaries were disbursed Eur, including Eur for sub-projects approved in the quarter 2 (Tomai Vinex, Alianta Vin second investment project, Papfin and Vinaria Tiganca) and Eur for Cricova sub-project approved last year. Table 5. Sub-sector & activity type distribution of the sub-projects which received allocations and were financed by EIB during the second quarter 2013, EUR Description of sub-project Total amount Value of EIB Value of FB co from which (EUR): of sub-project, loan, EUR financing, EUR EUR I Winemaking Winemaking equipment Constructing/renovating production buildings 3 Tracks for bottled wine transportation 4 Working capital for production process Intangible assets II Vineyards Viticulture machinery Vineyards establishment III Support industries Equipment Constructing/renovating production buildings IV For laboratories, training, education and development of food security Equipment for Laboratories of Education Institutions - - Total investment projects amount

10 The below diagrams shows the cumulative loan portfolio per viticulture zone as of : viticulture zone Allocated amount weight, % viticulture zone Codru 12,547, % viticulture zone Stefan Voda 1,250, % viticulture zone Valul Traian 981, % support industry 1,060, % 15,838, % The below diagrams shows the cumulative loan portfolio per PFIs as of : PFI Cummulative allocated amount, Eur number of subprojects financed weight, % from number from amount MoldovaAgroindbank 8,232, % 52% Moldindconbank 4,691, % 30% Banca Sociala 1,717, % 11% Energbank 1,197, % 8% Total amount 15,838, % 100%

11 The below diagrams shows the cumulative loan portfolio per Program component as of : Sub-sector Total amount of sub-projects, EUR Value of FB co financing, EUR TOTAL value of EIB loan approved by FB, EUR TOTAL value of EIB loan disbursed to FB, EUR weight, % Winemaking 25,335,052 11,984,883 13,350,169 11,247,821 84% Vineyards 5,951,148 4,522,514 1,428,634 1,150,667 9% Support industries 2,422,589 1,362,589 1,060,000 1,060,000 7% Loan guarantees, mezzanine and equity activities - 0% For laboratories, training, education and development of food security - 0% TOTAL 33,708,789 17,869,987 15,838,803 13,458, % 11

12 25,335,052 13,350,169 5,951,148 11,984,883 1,428,634 4,522,514 2,422,589 1,060,000 Winemaking Vineyards 1,362,589 Support industries Value of FB co financing, EUR TOTAL value of EIB loan approved by FB, EUR Total amount of sub-projects, EUR During the reported period PIU has conducted several actions in order to promote the Credit Line and to help Potential Beneficiaries to access EIB sources more easily, as follows: Informed 26 potential beneficiaries at their request by on EIB requirements and procedures, procurement rules and other issues in order to access the Credit Line sources, received and registered their applications ; Registered 4 Applications from Final Beneficiary ; Analysed and reviewed 6 business-plans of potential beneficiaries ; Signed and submitted the PIU Eligibility Notice for the following 6 sub-projects: Papfin, Vinaria Tiganca, Tomai-Vinex, Vinăria din Vale, Bravo Wine and Vinăria Zîmbreni. All above mentioned beneficiaries from PIU point of view are eligible for financing and their subprojects correspond to all eligibility criteria mentioned in the OM and Side-Letter; Provided support (as requested) to Credit Line Final Beneficiaries in organizing procurements according to EIB requirements. Reviewing procurement documentation of Credit Line Final Beneficiaries. During reporting period the PFI s (after receiving the PIU Eligibility Notice for the above mentioned sub-projects) examined the potential beneficiary s business plans, evaluated their payment capacity, estimated credit risk exposure level on each sub-project, made a positive credit decision submitted to CLD the PFI request for Sub-financing, as follows: and

13 Table 6 Beneficiary dossiers approval schedules Beneficiary Name Date of submission PIU Eligibility Notice CLD approval 1 Papfin LLC Vinaria Tiganca LLC Tomai Vinex JSC Vinaria din Vale JSC Bravo Wine LLC Vinaria Zimbreni LLC The detailed information regarding specific investments proposed by final beneficiaries, which received financing from EIB in the 2 quarter, are presented below: TOMAI-VINEX Description of subproject Total Value of Sub- Project Value of EIB loan approved Value of EIB loan disbursed Value of FB co financing, from which: in-kind cash contribution contribution Winemaking Winemaking equipment Constructing/renovating production buildings Intangible assets Vineyards Viticulture machinery Vineyards establishment Total ALIANTA-VIN Description of subproject Total Value of Sub- Project, Value of EIB loan approved, Value of EIB loan disbursed, Value of FB co financing, in-kind contribution from which cash contribution Winemaking Winemaking equipment Constructing/renovating production buildings Total

14 Description of sub-project Total Value of Sub- Project, PAPFIN Value of EIB loan approved, Value of EIB loan disbursed, Value of FB co financing, in-kind contribution from which cash contribution Support industries Production equipment Constructing/renovating production buildings Total VINARIA TIGANCA Description of sub-project Total Value of Sub- Project, EUR Value of EIB loan approved, EUR Value of EIB loan disbursed, EUR Value of FB co financing, EUR from which (EUR): in-kind contribution cash contribution Winemaking Winemaking equipment Constructing/renovating production buildings Working capital for production process Intangible assets - - Vineyards Viticulture machinery Vineyards establishment Total At the same time, PIU has worked with several potential beneficiaries of the Program in order to consult them regarding business plan elaboration, eligibility costs, eligibility of procurements process and other aspect of investment sub-project.

15 Prospects for allocations within the Credit line in the coming quarter. In the second half of the year 2013 it is planned to request from EIB the allocation through Credit Line instrument in the amount of EUR which will be directed for financing the 12 investment projects, as follows: Table 7 Prospects for allocations within Credit Line till , Euro PFI Energbank winemaking update winemaking equipment Alianța Vin (II tranche) update winemaking equipment, Moldindconbank winemaking renovate production buildings, Vinăria Țiganca and vineyard establishment and (II tranche) increase in medium and long term working capital Moldindconbank Moldova Agroindbank Moldindconbank Moldova Agroindbank Sub-sector winemaking winemaking winemaking winemaking/ vineyards Sub-project description update winemaking equipment, renovate production buildings, and vineyard establishment and increase in medium and long term working capital purchase of winemaking equipment update winemaking equipment, renovate production buildings, and vineyard establishment and winemaking (update equipment, renovate production buildings) Final beneficiary SRL Suvorov- Vin (II tranche) Cricova (III tranche) Tomai Vinex (II tranche) Total amount of investment project Total amount of EIB loan FB contribution, Euro Total amount to request from EIB loan 1,291, , , ,270 1,300, , , ,451 4,000, ,160 2,000, ,160 9,397,106 4,560,000 4,837, ,726 1,230, , , ,709 Vinăria din Vale 7,631,207 3,800,000 3,831,207 3,800,000 Banca Socială Moldindconbank Moldova Agroindbank winemaking winemaking/ vineyards winemaking/ vineyards winemaking (update equipment, renovate production buildings) winemaking (update equipment, renovate production buildings) winemaking (update equipment, renovate production buildings) Vinăria Zîmbreni 2,317,220 1,144,462 1,172,758 1,144,462 WIP (Wine international project) 976, , , ,900 Bravo Wine 6,214,044 2,559,415 3,654,629 2,559,415 Moldova Agroindbank Moldindconbank Moldova Agroindbank auxiliary industry winemaking/ vineyards winemaking/ vineyards update equipment for wine production and maturation process winemaking (renovate production buildings) update equipment for wine production and maturation process Berhord 3,176,049 1,587,714 1,588,335 1,587,714 Agrosudresurs 71,520 35,760 35,760 35,760 Cioc-Maidan Vin 4,000,000 2,000,000 2,000,000 2,000,000 Total 41,605,991 18,480,681 21,650,310 13,913,567 15

16 B. Leasing Instrument All activities for launching the Leasing instrument were based on the concept that leasing operation will be done by PIU. During the 2 nd quarter of 2013 PIU continued to develop leasing operation procedures, policies and regulations and to elaborate supporting documents for the Leasing instrument. In this scope PIU have done the following activities: 1) With the reference to amendments to PIU Regulation regarding leasing activity, which is aimed to permit to PIU manage and accomplish financing of potential beneficiaries of the Program, draft version of PIU Regulation was adjusted, after receipt of comments and suggestions from National Anti-Corruption Center and the National Commission for Financial Markets; 2) MoAFI submitted the proposed adjusted version of the PIU Regulation together with arguments on comments and suggestions received from MoF, Ministry of Economy, National Anti-Corruption Center and the National Commission for Financial Markets presented in "Table of divergences" to the Ministry of Justice (last institution implied in examination of this document before its submission to the Government for approval), After examining abovementioned document, the Ministry of Justice issued notice on it; 3) Comments and suggestions presented by Anti-Corruption Center in the Expertise Report, National Commission for Financial Markets and Ministry of Justice were carefully considered by PIU and MoAFI, those constructive and rational were taking into consideration for improving the provisions of PIU Regulation, while the importance of the rest of them in the text where argued and explained by PIU in the "Table of divergences"; Table 8 Information regarding PIU meetings on developing leasing Component Date Topics of the meeting The result of the meeting Recommendations and comments received from the National Anti- Corruption Center on proposed amendments to PIU Regulation regarding leasing activity Conclusions received from the National Commission for Financial Markets on proposed amendments to PIU Regulation regarding leasing activity Explanatory notes and arguments on conclusions of the National Anti-Corruption Center. Adjustment of "Table of divergences" Adjustment of the "Table of Divergences" with PIU/MoAFI view recommendations submitted by the National Commission for Financial Markets

17 Legal expertise on proposed amendments to PIU Regulation regarding leasing activity received from the Ministry of Justice Final version of the "Table of divergences" - a document prepared by MoAFI juridical department on comments and suggestions presented by all ministries and institutions involved Discussion the procedure of submission to the Government for approval the proposed amendments to PIU Regulation and related documents Adjustment "Table of Divergences" with PIU/MoAFI arguments on objections and proposals submitted by the Ministry of Justice Final version of the "Table of Divergences and adjusted version of the PIU Regulation Submission by MoAFI of the final version of "Table of Divergences of to all ministries and institutions involved in order to invite them to the public discussion of the proposed amendments to PIU Regulation 4) PIU finalized to develop the Attachment D to OM - Leasing Operations Procedures, including a number of Annexes related to this Attachment; 5) Continued to develop Leasing Policy and Client Evaluation Procedures for assessing lessee s ability to generate cash flow from business operations to service lease payments, elaborated a model of a Lessee' s business plan; 6) Continued to elaborate the PIU Risk management policy for leasing, with the purpose of identifying and evaluating general financial risks and risks related to leasing transactions, the work which was performed within PIU through organizing a number of meetings, discussions and debates (see the table below): Table 9. Information regarding PIU meeting on developing Risk management Policy on Leasing Component Date Topics of the meeting The result of the meeting Credit Risk management on Leasing activities Procedure on the analysis and monitoring of the Lessee s business plan Draft version of the PIU's Credit Risk management as part of the Risk management policy for leasing activity. Draft version of the PIU's Credit Risk management as part of the Risk management policy for leasing activity. 17

18 Risk management to the object financed by leasing Draft version of the PIU's Object finances by leasing Risk management policy The model of a Lessee's business plan Draft version of the model of a Lessee' s business plan C. Promote quality control bodies, education and research In the reported second quarter, PIU in order to develop this Program Component has undertaken several actions, as follows: 1) After defining the procedure of own contribution within this component and all the eligible costs that have been approved by the EIB, all the Education Institutions (Technical University from Moldova, National College of Viticulture and Winemaking and Scientific-Practical Institute of Horticulture and Food Technology), have added the sufficient own contribution part. 2) As a following step, on 3 and 4 April PIU has conducted monitoring visits to all the Educational Institutions. The scope of visits was to evaluate the actual conditions of the laboratories were the equipment will be installed; the places and sites were the investment will be made. As a result the PIU had recommended to the Educational Institutions Representatives to include in the sub-projects an Commitment to provide satisfactory conditions for the laboratories and places were the investment will be made. The detailed monitoring visit report can be found in Annexes nr.7- M&E Educational Institutions visit. 3) At the PIU request, together with Science Department, Training and Rural Extension from MoAFI, on the 29 of May was held the third-decisional working group consisting of: MoAFI, Ministry of Education, Academy of Science and related Research Institutions representatives. During this meeting, the created Working group has evaluated the need of the investments to be made at educational institutions and approved the sub-projects presented and elaborated by the Educational Institutions. In the table below is shown the prospective allocation for above mentioned institutions: Table 10. Information regarding Education Institutions sub-projects, EUR Education Institutions Total amount of sub-project Total amount of EIB loan Value of FB co financing Tehnical University of Moldova 1,604, , , National College of Viticulture and 1,575, , , Winemaking Chisinau

19 The Institute of the Viticulture and the Food technology 3,210, ,574, ,636, Total 6,391, ,153, ,237, ) In this context, PIU has started to prepare all the necessary procedures in order to move further this component, this included the elaboration of the presentations reports to be sent to the EIB for approval and procurement plan divided per type of procurement activity and estimated costs. 5) Additionally, PIU has begun the elaboration of the Attachment F to Operational Manual regarding the Financing the Education and Research Institutions Component. The objective of this Component is to raise the capacity and quality and relevance of the training, education, and research institutions related to viticulture and winemaking sector. This can be achieved by strengthening the institutional capacity through provision of new and modern lab, vineyard and micro-winery equipment and creation of all necessary conditions for the adequate educational and research processes. D. Program Management Component On the 25 of April PIU had a meeting with EIB representatives Jaani Pietikainen and Luca PONZELLINI, Senior Loan Manager. During the meeting with representatives of the European Investment Bank and PIU were approached various practical issues related to the effective implementation of the first component Credit Line, next stage of approval Leasing instrument and distribution of the loan to the Educational Institutions designed for Laboratories, Training and Development of Food Security. The second part of the meeting was dedicated to the discussions with Minister of Agriculture and Food Minister Vasile Bumacov and Agriculture Advisor, Waldemar Sochaczewski. The discussion topic was the development of the agro-food wholesale market, as well as the second phase of technical assistance for the project. 1. Management Information System elaboration During the reported period the PIU together with contracted ICT service provider Noi TI & Service LLC continued to develop of the MIS component related to the Credit Line operations and the component on Monitoring and Evaluation of Final Beneficiaries. The recording and reporting documents used 19

20 within both components were developed, tested and adjusted. These components are fully operational. 2. Monitoring activity During the reported period of 2013, PIU has continued implementing monitoring activity and has performed several monitoring visits to the Credit Line Final Beneficiaries and Educational Institutions as follows: Table 11 Information regarding monitoring visits during second quarter 2013 Beneficiary Name Tomai Vinex Monitoring Visit Dates 02-April-13 National College of Viticulture and Winemaking 03-April -13 Chisinau Tehnical University of Moldova 03-April -13 The Institute of the Viticulture and the Food technology Bravo Wine First Line Vinaria Zimbreni Cricova Fautor 04-April May June June June June-13 PIU has continued monitoring activity through continuous monitoring and keeping in touch with final beneficiaries through telephone, s and visits. During the second quarter of the 2013, PIU has performed monitoring visits-inspection visit to the Credit Line potential/beneficiaries. The purpose of the visits performed was to get acquainted with the actual physical status of the project sites described in the investment project and inspect sites where procured equipment will be installed. The monitoring visit results for the Tomai Vinex and Bravo Wine have been described in Procurement activities part and for the concerned Reports for Tomai Vinex and Bravo Wine please see in Annex nr 5 and 6 M&E visit reports.

21 In the period of 3 to 4 April PIU has conducted monitoring visits to all the Educational Institutions. The scope of visits was to evaluate the actual conditions of the laboratories were the equipment will be installed; the places and sites were the investment will be made. As a result the PIU had recommended to the Educational Institutions Representatives to include in the sub-projects an Commitment to provide satisfactory conditions for the laboratories and places were was requested the financing from EIB. Additionally in the case of The Institute of the Viticulture and the Food Technology, as reconstruction is planned from scratch and the project includes complex works, there is a need in to verify that the project and construction works were set correctly and all the required works have been included and its costs have been correctly estimated. The detailed monitoring visit report can be found in Annex nr.7- M&E Educational Institutions visit. On the 7 th of June PIU has performed a monitoring visit to the First Line". The purpose of the visit was to verify the procurement of Flexographic machine RELEX GEARLESS C.I. 800/8c and also the Firstline representatives have shown the place where they began to construct storage buildings for for finished goods (from own resources from future sales). As a result, PIU confirmed that all the procurements contracts form the EIB sources have been respected. As a future action, PIU will monitor the own contribution part related to the construction of for storage buildings for finished goods forecasted to be implemented from future sales. At same time, PIU has performed a Prefinancing Inspection Visit to Vinăria Zîmbreni. FB has requested financing from EIB Credit Line to procure equipment for grape processing, for wine fermentation and storage, for automated cooling system and for renovation of processing building. The PIU decided to inspect the FB declared own contribution for the investment project processing buildings and technological equipment. PIU inspected the declared contribution of the Final Beneficiary to the investment project, the premises where the production buildings will be renovated and collected photo materials on the existing situation. The detailed monitoring visit reports can be found in Annex nr.8 and 9 - M&E visit reports. On the 27 of June PIU has undertaken a visit to FB Fautor in order to get acquainted with Sub-project implementation status - collect pictures from purchased goods, from cellar (which was built from EIB resources) and from production building (which was renovated from EIB resources) and monitor the implementation status of procurement contracts while these being implemented by FB. The procurements are done accordingly to the project. The detailed monitoring visit reports can be found in Annex nr M&E visit report. It was agreed that next PIU visit on monitoring will be when the 21

22 implementation status of Sub-project winemaking component will be done, however this is intended to take place not earlier than august 2013 when equipment for wine bottling are expected to be installed. 3. Reporting and Budgeting During the reported period PIU prepared and submitted the following reports: 1) Financial Reports due to deadlines and formats established by the national legislation to State Local Authorities (MoF, Fiscal Authority, social insurance authority, etc.); Table 12. Total Program Management expenditures for I-II quarters 2013, EUR PIU Management GRM Grant Total 1nd quarter expenditures ,77 2nd quarter expenditures ,05 - Cumulative amount of OPEX as of , , , ,82

23 4. Procurement activities During the 2 nd quarter of 2013 the PIU procurement operations were oriented towards the following main directions: A) Reviewing procurement documentation of Credit Line Final Beneficiaries, including - Monitor implementation of procurement contracts by FBs under Credit Line Component. - Providing support (as requested) to Credit Line Final Beneficiaries in organizing their procurements according to EIB requirements. B) Organizing procurements related to PIU; monitor implementation of PIU signed contracts with suppliers/consultants. C) Elaborate the Procurement policy and the Procurement Plan for Program Education and Research Institutions Component. a) Consultancy and monitoring provided by PIU on procurement aspects to Project Final Beneficiaries in organizing their procurements under Credit Line Component:* Date Q2 02 April 2013 Final Beneficiary Tomai Vinex Consultancy/Reviewing undertaken by PIU on procurements organized by FB: As requested, PIU has received via from the FB, copies of contracts to be financed from EIB Credit Line. Due to the small contract amounts (up to 100thsnd Euros per contract), all suppliers have been selected by the FB via direct contracting. The FB intends to refurbish existing concrete tanks for wine storage (dress the interior of existing concrete tanks with stainless steel sheets); procure equipment for primary treatment of wine (crushers, grinder pump); equipment for removal of sediments from wine (screw pump with mechanical speed variator); procure machines for working in vines; and procure auxiliary materials necessary for planting 20 ha of vines. The FB intends to procure from EIB loan the following: Refurbishing of existing concrete tanks for wine storage: 1) Contract with Aldea SRL (Moldova) in the amount of 66,300 EUR for procurement of a refrigeration unit for refurbished wine storage tanks and plate filter for filtering the wine. 2) Contract with Bemas-Grup SRL (Romania) in the amount of 74,829 EUR for procurement of materials necessary for capital refurbishment of existing wine storage tanks and procurement 23

24 of 3 centrifugal pumps for winemaking. 3) Contract with OSM Engineering SRL (Moldova) in the amount of 44,436 EUR for procurement of wine storage tanks refurbishing services (includes complete renovation of tanks cellar 5 (refurbishing 18 tanks and related infrastructure with automation process for fermentation processes) 4) Contract with Raccorderie Inox Munaretto SRL (Italy) in the amount of 74, EUR, for procurement of other accessories necessary for tanks refurbishment. Note: The PIU team has performed an inspection visit (on 02/04/2013) within the production premises of Tomai Vinex in order to get acquainted with the reasons why the FB decided to keep the old, concrete tanks and use them as exterior walls while the interior will be dressed with stainless steel sheets. As the director of Tomai Vinex explained (Mr. Sibov) the main reason to keep the old tanks (18 pcs) is because it is almost impossible to destroy them without using explosives, which is irrelevant because the respective production hall is situated in the middle of the production zone (this same problem with destroying the old concrete tanks was identified in 2012 by PIU during a previous visit at another potential Beneficiary company Fabso from Sofia village, Hincesti raion). On the other hand, as the FB informed the PIU - the concrete tanks can act as support for the new tanks thus allowing Tomai Vinex to build new tanks using thinner (and thus cheaper) stainless steel sheets. The concrete walls will also act as additional thermal insulation this contributing to energy efficiency.

25 winemaking equipment 1) Contract with Enoveneta Spa (Italy) in the amount of 51,600 EUR, for procurement of equipment for primary treatment of wine (crushers, grinder pump); and equipment for removal of sediments from wine (screw pump with mechanical speed variator). 2) Contract with Crystalman International LLC (China) in the amount of 31,303 Eur for procurement of a kit form for making 1 litre bottle. 25

26 23 May, 2013 Bravo Wine SRL Equipment for working in vineyards Several contracts signed: 1) Agro Maschien & Tehnologie Handels GmbH (Germany) - 70,726 Eur 2) Carvidon Service SRL (Moldova) - 2,827 USD 3) Mecagro (Moldova) - 7,028 USD Auxiliary materials necessary for planting 20 ha of vines Several contracts were signed for procurement of vine seedlings, wiring, fertilizers, pillars etc. in total amount of ~180,000 Eur. Contracts were signed with Moldovan companies: Vitpom Consult SRL; Spades-Plus SRL; Elvitis-Com SRL; AMPELOS-PLUS SRL, Metalex-Kin SRL; "ÎNTREPRINDEREA PENTRU SILVICULTURĂ COMRAT" ÎS; AMPELOS-PLUS SRL. The procurements were made by FB based on EIB agreed procurement requirements under Credit Line Component and the PIU elaborated Guide on Procurements for Credit Line Component. The FB intends to request and use the EIB loan for building up (from scratch) a wine factory in Stefan-Voda raion, and endow this new factory with new winemaking equipment. As requested, PIU has received from the FB, copies of suppliers selection documents for goods/construction services to be financed from EIB Credit Line (received Evaluation Reports and price quotations). Construction of a wine factory: 1) FB has collected price quotations from the following local companies: SRL Urscons-Prim ,32 EUR SRL Darsimid ,52 EUR SRL Alimconstruct Grup ,35 EUR Offer from SRL Alimconstruct Grup was disqualified by the FB because of major deviations with reference to the insufficient quantities of construction materials indicated in the price offer (for example 60 tonns of metal and aprox. 30 tonns of concrete less than real necessities) this leading to the risk of having a non-secure construction. Thus, FB has selected the company SRL Urscons-Prim, Moldova. Price quotation is in amount of ~1,827, EUR (converted from MDL).

27 Procurement of winemaking equipment for the new wine factory: 1) FB has collected price quotations from the following companies: SRL Berhord Italy - Moldova EUR Tecnfood-Group Italy - Moldova EUR Parcitank SA Spain EUR Fabbri-Inox France - Moldova EUR No price quotation was disqualified by the FB. Nevertheless, the selected company for contract award was PARCITANK S.A EUR, Spain. FB arguments the selection of the highest price quotation with the following: the emphasis during selection was put exclusively on the quality (both of raw materials used for manufacturing the equipment and quality of the final product the wine), know how, technological efficiency, small usage costs, equipment use duration, most convenient transportation/delivery/warranty and payment terms. In conclusion, it is stated that at this stage, the procurements were made by FB based on EIB agreed procurement requirements under Credit Line Component and the PIU elaborated Guide on Procurements for Credit Line Component. The FB undertakes to send to PIU for review copies of contacts to be signed under the 2 selections mentioned above. In addition, in order to get acquainted with the FB own s contribution (160 ha of young vines), to inspect the place where the future wine factory will be built and endowed out of EIB Credit Line, the PIU team has performed an inspection visit (on 23/05/2013) within the existing young vineyard and future production premises of Bravo Wine SRL in order to get informed/collect info on the proposed investment project. More details on visit findings can be found in Attachment June, 2013 Vinaria Zimbreni The FB intends to request and use the EIB loan to procure the following: 1) Equipment for modernizing the grapes processing hall; 2) Equipment for wine fermentation and storage; 3) An automated cooling system As requested, the FB sent to PIU for review (via ) the following documents with ref. to winemaking equipment supplier selection process: Copies of price quotations received; copy of the quotations evaluation report, signed by FB; copy of the signed contract. The FB intends to procure all of the above mentioned equipment from a single company, 27

28 10 June, 2013 Cricova S.A. that was selected as follows: Contract for procurement of winemaking equipment. Four price quotations have been received, all from Moldovan companies: - BERHORD MOLDOVA 1,082,485 Eur - BEMAS MOLDOVA 767,200 Eur - MOLINART MOLDOVA 257,280 Eur - TMINOX MOLDOVA 1,925,860 Eur FB has selected the price offer from Berhord SRL, Moldova EUR. Offer from Molinart has been disqualified because the supplier did not propose full quantities of requested equipment and the proposed tanks do not correspond to technical specifications. Offer from TMINOX also has been disqualified because the proposed equipment does not correspond to technical specifications (in addition the offer does not include the requested nitrogen generator and the pipes for its circulation). In addition, the FB intends to use EIB funds to perform repairing at the wine storage hall. For this activity (costing ~61,976 Eur) the construction company is still to be selected. Though being informed beforehand on procurement requirements under Filiere du Vin Upgrading Program, the FB, while organizing its procurement, did not comply with PIU Operation Manual (chapter VI / para 6.2 / c):...review the offers received from at least 3 qualified companies from at least two different countries... ; meaning that the FB has collected and analysed price quotations from companies/dealers originating from one country (Moldova). In conclusion, taking into consideration that the investment activities proposed by FB lead to modernizing the winemaking process this fully complying to Program objectives, irrespective of the procurement noncompliance described above, PIU qualifies the procurements made by FB as being acceptable. As agreed in the PIU eligibility notice on the investment project of Cricova SA, this FB provided for PIU review documentation on the way the construction services suppliers were selected / copies of respective contracts. PIU has received and reviewed the following: 1) Contract for procurement of Biochemistry hall reconstruction and extension services. Three price quotations have been received: Groven Grup SRL, Moldova 126,613 Eur;

29 Hipercons SRL, Moldova 137,005 Eur; Speranta Pe-Com SRL, Moldova 147,287 Eur. FB has selected the smallest price offer from Groven Grup SRL, Moldova - 126,613 Eur and provided for PIU review the copy of signed contract, copies of price quotations and signed minutes of price quotations evaluation. 2) Contract for procurement of Sparkling wine main production hall reconstruction services (floors and sewerage sistem). Four price quotations have been received: Groven Grup SRL, Moldova 201,300 Eur; Consocivil fil. 13, Moldova 228,983 Eur; Construct resurs SRL, Moldova 213,700 Eur; Promstroi Grup SA, Moldova 151,070 Eur. FB has selected the highest price offer from Consocivil fil. 13, Moldova - 228,983 Eur and provided for PIU review the copy of signed contract, copies of price quotations and signed minutes of price quotations evaluation. In its Evaluation Report, the FB motivated the selection of the highest price quotation with the fact that Consocivil fil. 13 from technical point of view its quotation corresponds best to the technical requirements set forth in the FB s reconstruction project design. 3) Contract for procurement of an Elevated runway (for technical and technological networks) construction services. Two price quotations have been received: Consocivil fil. 13, Moldova 14,801 Eur; SA Terra Lig, Moldova 17,399 Eur. FB has selected the smallest price offer from Consocivil fil. 13, Moldova 14,801 Eur and provided for PIU review copies of price quotations and signed minutes of price quotations evaluation. In addition, at the end of June, PIU representatives have performed a monitoring visit at Cricova s premises to get acquainted with investment project implementation status and agree on aspects related with filming a short video documentary/success story on Filiere du Vin Program. During the visit were inspected construction sites that are being financed from EIB Credit Line. Cricova informed PIU that construction works are estimated to end mid-august. Beginning with July month Cricova is expecting a team of engineers from Italy (representatives of company Innoteca) to come and prepare the engineering networks necessary to install the hybrid 29

30 bottling line. Component parts of this bottling line will begin to be shipped to Cricova in July, August and September months. The line is expected to be assembled by October month and its testing will continue till mid-january The PIU team also inspected the following: - the yeasts preparation hall this was fully repaired, equipped and functional; - the energy block this was completely constructed and needs to be equipped. - the hall where the Hybrid bottling line will be installed at the moment this hall is being renovated (only the frame of existing building is maintained, all the rest being under capital renovations roof, floors, engineering networks, walls and insulation etc.) In conclusion, it is stated that procurements were made by FB based on EIB agreed procurement requirements under Credit Line Component and the PIU elaborated Guide on Procurements for Credit Line Component. *Final Beneficiaries were receiving continuous support/communication with PIU on procurement issues by means of /phone/meetings. B) Procurements organized by PIU; monitoring implementation of signed contracts with suppliers/consultants. 1.) During the reported period PIU had several staff hiring activities: - In line with expanding necessities for field monitoring visits under Credit Line Component and the emerging Research and Education Institutions Component, an additional Project Driver was contracted by PIU on 20/05/2013 (Mr. Gheras Constantin ). - In order to have expertise and advice (necessary to Project Executive Director (PED), PIU staff members, Final Beneficiaries and other relevant stakeholders) on all aspects that involve investments to be made in construction / reconstruction of facilities related to wine sector, under Credit Line Component, an Construction Specialist was competitively selected by PIU. Contract was signed with Mrs. Irăna Ermacova-Cercel on May 01, ) During Q2, 2013, the PIU has organized a series of procurements/tenders and signed the following contracts/amendments to existing contracts*: Activity start date Procurement method & subject of the contract Contracted company Contract implementation Contract value (~

31 status converted in Euro) 10 April 2013 Direct contracting for participation services at the exhibition Wine Vernisaj from April 16, 2013 (Contract no. # C6A from April 10, 2013) Association of Producers and Exporters of wine Will be implemented by 30 April, Euro 10 April, 2013 Direct Contracting for the following services: car washing, office cleaning, seminars catering services, heating/electricity and AC maintenance, minor repairing - all for PIU rented offices (Contract no C6B from April 10, 2013) SRL Agrofermotech Will be implemented by 31 January, Euro 12 June, 2013 Direct contracting of video spot creation services filming of a video spot on Program success stories to attract more potential beneficiaries (Contract no. # C6D from June 12, 2013) Private entrepreneur Mr. Iurie Virlan Will be implemented by 31 January, Euro * Very small procurements (up to 600 Euro) that did not require any contract signature were not reflected in this report. In total, during the reported period (Q2: April 01 July 01, 2013) the PIU spent EUR for goods, services, and consulting services (including salaries of PIU staff). This amount came as contribution of RM Government. 5. Program PR actions In the second quarter of 2013, Program information was disseminated through different channels: radio publicity, seminars, exhibitions, forums, articles in magazines and internet portals. During the second quarter, due to Russian diversity from Moldova, it was decided to air the Russian version of the radio spot in the UTA Gagauzia region due to a big number of wine and grape producers in the region. PIU has started the airing of the Program Russian radio spot at the radio chain Albena in biggest towns from the region: Comrat and Taraclia for a period of 3 months starting with 20 of May 2013 in order to continue targeting the small and medium wine sector beneficiaries. 31

32 In the same period, PIU has contracted a professional company in order to elaborate the Program video spot. The video concept will be based on success stories and interviews with Final Beneficiaries. The spot is indented to be ready starting with mid of August. PIU started collaboration with several Firms providing Consultancy in Agriculture, such as ACSA and Success Consulting. These consultancy firms organize seminars, trainings; provide assistance and consultancy in agricultural and rural zones. PIU has made several presentations regarding the Program s activity and has distributed informative leaflets in wine related regions. In May, in Punkt a well-known magazine, PIU has placed an interview with Mr. Bumacov Vasile, the Ministry of the Agriculture and Food Industry regarding the Program s activity development and current situation of the wine sector in Moldova. In addition, in Logos Press newspaper N 23(999) from the 21 of June, 2013 appeared an article dedicated to the Filliere du Vin Credits, mentioning all the Final Beneficiaries that have received EIB financing so far and credits conditions and interests rates. PIU team has participated to wine related exhibition in Moldova, at Vernisajul Vinului -Spring Edition 2013 held on 16 of April, event which is gathering wine producers, wine professionals and wine lovers. PIU has been present with Program s informative Banners, distributed promotion leaflets and materials and has discussed with the traditional wine industry representatives, in order to inform Potential Beneficiaries with the scope, objectives and financial instruments of the Program, with eligible and ineligible activities/beneficiaries of the Program. PIU has also updated the design and the text from the informative leaflets and all the promotion materials. Additionally, PIU has placed Promotional Stands at Ministry of Agriculture and Food Industry office, located at the 7 th Floor along with wine producer s stands. During the mentioned period PIU has placed information about the program on several websites with tangency to the small and micro-enterprises, such as: vinmoldova.md, odimm.md and continued to constantly update and improve the website content with events and news in order to maintain transparency and a good visibility of Program s activity.

33 Annex 1. Total Project Costs for the Project - Cumulative Data (in EUR) Current quarter Cumulative to date from the beginning of 2013 EIB SOURCES: Project component/activity Planed Actual Variance Planed Actual Variance ( ) ( ) CREDIT LINE Component 1: Winemaking enterprises development ( ) ( ) Component 2: Viticulture enterprises development ( ) ( ) Component 3: Associated industries enterprises development TOTAL FOR CREDIT LINE ( ) ( ) ( ) ( ) LEASING Component 1: Winemaking enterprises development Component 2: Viticulture enterprises development Component 3: Associated industries enterprises development TOTAL FOR LEASING GOVERNMENT OF MOLDOVA SOURCES: Operational costs of PIU from GRM * (according to Working plan approved by BoD) FINANCING OF LABORATORIES, TRAINING, EDUCATION ABD DEVELOPMENT OF FOOD SECURITY ( ) ( ) (46 521) (46 521) TOTAL GRM (46 521) (46 521) Operational costs of PIU Italian Grant * (according to Memorandum signed by Italian association ) TOTAL IG Total Project Expenditure ( ) ( ) 33

34 Annex 2 Sub-sector distribution of EIB Allocations under Filiere-du-Vin Upgrading Finance Contract dated 23 November 2010 (FI No25.853) Allocations data Sub-sector maximum amount approved/a llocated under I Allocation letter I tranche II tranche III tranche IV tranche received from EIB approved/a llocated under II Allocation letter received from EIB approved/a llocated unde III Allocation letter received from EIB approved/a llocated unde IV Allocation letter received from EIB Total approved/a llocated under Allocation letter Total Received from EIB on PIU bank account Total tranferred by PIU to FB through PFI Differenc e from allocated and transferre d by EIB Balance by sub-sector Winemaking 37,500, Vineyards 26,250, Support industries 15,000, Loan guarantees, mezzanine and equity activities For laboratories, training, education and development of food security 15,000, ,750, Total 75,000,

35 Annex 3. Total Allocated amount by EIB for the Project - Cumulative Data in 2013 Allocations data Sub-sector maximum amount approved/a llocated under I Allocation letter I tranche II tranche III tranche IV tranche received from EIB approved/a llocated under II Allocation letter received from EIB approved/a llocated unde III Allocation letter received from EIB approved/a llocated unde IV Allocation letter received from EIB Total approved/a llocated under Allocation letter Total Received from EIB on PIU bank account Total tranferred by PIU to FB through PFI Differenc e from allocated and transferre d by EIB Balance by sub-sector Winemaking 37,500, Vineyards 26,250, Support industries Loan guarantees, mezzanine and equity activities For laboratories, training, education and development of food security 15,000, ,000, ,750, Total 75,000,

36 July August Septembe r Annex 4. Planned activities for the III quarter 2013 No Activities III quarter I CREDIT LINE 1 To organize informative meetings with potential beneficiaries through: regional agricultural divisions, professional associations from the sector, NAF Agroinform, ACSA and other relevant institutions 2 To identify potential beneficiaries of the Program and inform them about the way to access EIB funds, terms and conditions for on-lending, procurement rules 3 To consult potential beneficiaries in filling in the Questionnaire of the Program applicant and Business plan elaboration. 4 To consult potential beneficiaries on eligibility issues of the investment projects 5 Continuous review of Procurement documentation of the Final Beneficiaries. Continuous consulting of potential beneficiaries on procurement rules/practices to be followed 6 To finance sub-projects through participating commercial banks based on request of payment from CLD 7 To analyse and review Business Plans of potential beneficiaries 9 To submit to the MoF the disbursement request from EIB loan. 10 To consolidate statistic and financial data on final beneficiaries. II LEASING 1 To continue monitoring of updates in the Moldovan regulations on leasing activities, legal and fiscal aspects of the finance leasing 2 To finalize design of Attachment D to Program Operations Manual regarding the Leasing instrument 3 To develop Leasing Policy and Client Evaluation Procedures 4 To complete design of the Beneficiary Leasing Guide and Business Plan.

37 5 To elaborate the Accounting Policy and Financial Reporting procedures on Leasing operations in accordance with NAS and IFRS principles and rules 6 To elaborate the Risk Management Manual 7 To elaborate the Management Information System (MIS) for leasing activities 8 To elaborate the Internal Audit and Monitoring Policy for leasing activities 9 To elaborate the Internal Security Policy 10 To organize several informative meetings with potential beneficiaries in order to inform on lease terms and conditions, provide consultancy to potential beneficiaries and support them to fill in the leasing documents 11 To identify local insurance companies in order to establish partnership contacts 12 To organize abroad study visit to a leasing company specialized in finance leasing of wine equipment, machinery and viticulture vehicles 13 To attend relevant training courses such as: a) Client's Business and Lease application Analysis. Credit scoring of lessee; b) Business planning and financial modeling for leasing activities. Financial Analysis of leasing activity; c) Delinquency management. Analysis of reimbursement risk. Nonperforming lease financing recovery. d) Risk management of Leasing transactions 14 To translate part of Operations Manual and other relevant documents on leasing instrument III Capital Investments & Loan guarantees To collaborate with external consultancy offered within Study on the framework for the development of the Filière du Vin Upgrading and other consultancy offered by EIB on development of these financial instruments IV Promote quality control bodies, education and research 1 To finalize and send to EIB for approval the draft of Operational Manual for Project Component Attachment F FINANCING OF EDUCATION AND RESEARCH INSTITUTIONS 2 Present the OM on component F to Program s Council of Observers for approval 3 Begin implementing the component F: FINANCING OF EDUCATION AND RESEARCH INSTITUTIONS 37

38 V VI COMPONENT (starting with first procurements). Procurement and operational activities 1 Continuously monitor implementation of goods/consulting contracts. Sign/extend new contracts for supply of goods and services (including individual consulting services) 2 To execute monthly payments of PIU staff and individually contracted consultants salaries, payments being made on the date of calculation and payment, not later than the last day of the current month. PR activities 1 To maintain and update the website s content 2 To promote the Program through Radio Channels, diffusing a Russian version in UTA Gagauzia region 3 To develop Program s video spot and contract the broadcasting company V 4 To participate at wine/agricultural TV shows (TV show Bastina, of the Moldova1 channel, wine related programs) 5 To write, edit and place several articles in national newspapers and magazines targeting the agriculture and wine industry (Agricultura Moldovei, Curierul Agricol, Viticultura şi Vinificaţia, Business Class, Punkt, etc.) 6 Organize meetings in territories together with Agricultural Consultants Agroinform, ACSA and National Federation of Farmers and Success Consulting 7 Distribute new informative leaflets in program participating banks, especially in representative s outside Chisinau MIS elaboration and implementation 1 To organize meetings between PIU and Noi TI & Service in order to achieve the MIS development plan 2 To develop system for recording and reporting the credit application and documents within Credit Line 3 To test and adjust documents and reports developed for Credit Line instrument 4 To develop database of the clients which will benefit from financing through Leasing instrument 5 To elaborate the form of request for payment, for finance contract, payment schedule for leasing, minutes decisions of financing committee, etc. 6 To develop database of suppliers of equipment and machinery, which will be procured for leasing

39 operations, and to develop reporting system per suppliers 7 To develop reporting system for Leasing instrument 8 To test and adjust documents and reports developed for Leasing instrument 9 To develop reporting system on performance indicators (second level indicators) VI Budgeting and Reporting 1 To prepare all quarterly reports for 2013 and annual reports for 2013 for relevant institutions (MoF, Fiscal Authority, social insurance authority, etc.) 2 To elaborate Program Progress report for the IV quarter of To develop and submit to MoAFI for approval and MoF for coordination annual financial plans and detailed Program budget for 2013 per components, according to MoF requirements 4 To develop detailed quarterly plan of activities for PIU for To elaborate and submit quarterly progress reports as required by Finance Contract signed with EIB VII Monitoring and Evaluation 1 To continue performing regular monitoring visits and collect information regarding BF Sub-projects implementation 2 To prepare Monitoring Visit reports for sub-projects implemented by FB 39

40 Annex 5. M&E Monitoring visit Tomai Vinex Pre-financing Inspection Visit Report at FB site Project Component: Filiere du Vin, Credit Line Component Final Beneficiary Name (FB): Tomai Vinex Date of Visit: 02/April/2013 Monitoring Place Visit: Tomai village, Comrat raion. Monitoring Visit Participants: Oleg LIPCEAN PIU Procurement Officer Ecaterina Caplevatchi PIU Lease Specialist Radu COJOCARU PIU Driver/Courier Purpose of Visit: Partners, Beneficiaries and other stakeholders met: FB has requested financing from EIB Credit Line to refurbish existing soviet-time-old concrete tanks for wine storage (dress the interior of existing 18 concrete tanks with stainless steel sheets); and procure equipment/infrastructure in the respective hall. The PIU decided to inspect the existing tanks, discuss with the FB the reasons for using the old tanks. Mr. Sibov Director of Tomai Vinex. Report prepared by: Oleg LIPCEAN

41 Part 1. Visit details /outcome The PIU team has performed an inspection visit (on 02/04/2013) within the production premises of Tomai Vinex in order to get acquainted with the reasons why the FB decided to keep the old, concrete tanks and use them as exterior walls while the interior will be dressed with stainless steel sheets. As the director of Tomai Vinex explained (Mr. Sibov) the main reason to keep the old tanks (18 pcs) is because it is almost impossible to destroy them without using explosives, which is irrelevant because the respective production hall is situated in the middle of the production zone (this same problem with destroying the old concrete tanks was identified in 2012 by PIU during a previous visit at another potential Beneficiary company Fabso from Sofia village, Hincesti raion). On the other hand, as the FB informed the PIU - the concrete tanks can act as support for the new tanks thus allowing Tomai Vinex to build new tanks using thinner (and thus cheaper) stainless steel sheets. The concrete walls will also act as additional thermal insulation this contributing to energy efficiency. Part 2. Conclusion Based on the information provided by the FB, the PIU found the proposed technological scheme/fb arguments to maintain the old tanks - as acceptable to be financed from EIB Credit Line. Future monitoring will be required to inspect the way the tanks are refurbished. 41

42 Annex 6. M&E Monitoring visit Bravo Wine Pre-financing Inspection Visit Report at FB site Project Component: Filiere du Vin, Credit Line Component Final Beneficiary Name (FB): Bravo Wine LLC Date of Visit: 23/May/2013 Monitoring Place Visit: Stefan Voda raion, nearby Purcari village. Monitoring Visit Participants: Oleg LIPCEAN PIU Procurement Officer Natalia Agapii PIU Finance Specialist Purpose of Visit: FB has requested financing from EIB Credit Line to build from scratch and fully equip a wine making factory, procure additional vineyard maintenance equipment. The PIU decided to inspect the FB declared own contribution for the investment project (160 ha of young vines), inspect the place where the future wine factory is planned to be built. Partners, Beneficiaries and other stakeholders met: Mr. Eugeniu Pislaru Director of Bravo Wine. Report prepared by: Oleg LIPCEAN, PIU Procurement Officer Part 1. Visit details /outcome The PIU team has performed an inspection visit (on 23/05/2013) within the existing young vineyard and future production premises of Bravo Wine SRL in order to get informed/collect info on the following: 1) Inspect the declared contribution of the Final Beneficiary to the investment project 2) Inspect the premises where the future winery production buildings will be constructed and equipped out of the EIB Loan proceeds. 3) Collect photo materials on the existing situation to be used further as success story material

43 The PIU representatives met with Bravo Wine director Mr. Eugeniu Pislaru, who showed the vineyard, the place where the winery is planned to be built, the place where future wine hotel is planned to be built etc. Being asked by PIU on the estimated date to begin the construction of the winery, Mr. Pislaru has explained that he is still in the process of finalizing the procurements/tenders for construction services, procurement of winemaking equipment and vineyard equipment. No concrete date was provided to PIU with reference to submitting to PIU copies of contracts, copies of price quotations received with Evaluation reports. Mr. Pislaru was repeatedly informed by PIU that in order to be able to issue a PIU acceptance letter on the investment project, PIU needs these procurement documents. The following was inspected by PIU: FB own contribution 160ha of young vineyard: 43

44 Annex 7. M&E Educational Institutions visits Visit Meeting Notes Project Component: Filiere du Vin, Credit Line Component Final Beneficiary Name (FB): Tehnical University of Moldova National College of Viticulture and Winemaking Chisinau The Institute of the Viticulture and the Food technology Date of Visit: Monitoring Visit Participants: Oleg Lipcean, Procurement Manager Diana Prisacaru, Administrative Manager Purpose of Visit: The scope of visits was to evaluate the actual conditions of the laboratories were the equipment will be installed; the places and sites were the investment will be made. Partners, Beneficiaries and Mr. Balanuta, Project Coordinator UTM other stakeholders met: Proffesors, CNVVC Emil Rusu, Project Coordinator ISPHTA Report prepared by: Diana Prisacaru

45 Part 1. Beneficiary Presentation Beneficiary: Technical University of Moldova Project Amount, including : Total Amount: EUR EIB Fund: EUR Own Contribution: EUR Meeting notes All the laboratories require renovation and modernization as they are equipped with old furniture, windows need to be replaced, electricity to be changed, the walls must be rebuilt. 45

46

47 The University Dean has promised to assure with satisfactory conditions and repair the laboratories in the case when the project will be approved by the working group under MoAFI and EIB. Same agreement they had with a Edelweiss Foundation that has equipped the Food Industry Laboratory and the University has executed all the needed repairing. One of the degustation laboratory in which will be installed EIB financed equipment. 47

48 The lab has been entirely renovated, windows has been changed (UTM has own window line production). Microvinification section has been renovated.

49 Recomandations: To include in the Investment Sub-project, a commitment in which the University agrees to renovate the laboratories, places, sections equipped by the EIB funds. As own contribution permits, to include new furniture expenditures. Beneficiary: National College of Viticulture and Winemaking Chisinau Project Amount, including : Total Amount: 1,575,830EUR EIB Fund: 777,837 EUR Own Contribution: 797,993 EUR Meeting notes The College did not have any renovation activities for many years; therefore there is a need of capital investments to be made. If other universities have had access to some investments, in the case of College, all laboratories requires repairs, the class rooms are equipped with old furniture, windows need to be replaced, electricity system to be changed, the walls must be rebuild. 49

50 Main Laboratory (202 ) in which the equipment will be installed.

51 Recommendations: To include commitment to assure good conditions for the laboratories and to add new furniture in the sub-project. Beneficiary: The Institute of the Viticulture and the Food technology Project Amount, including : Total Amount: ,5 EUR EIB Fund: ,5 EUR Own Contribution: ,0EUR Meeting notes Laboratories are in very good condition, renovations has been made in almost all the rooms Recommendations: to add furniture and working tools. 51

52

53 Second part of the Sub-project: Renovation of the Microvinification section. Currently the section is completely destroyed and requires complex renovations, starting with roof changing, the change of electricity, water systems, walls renovation. 53

54

55 One of the important sections of the sub-project: Revitalization of the Green house. Curent green house : 55

56 The place intended for the second green house revitalization.

57 Recommendation: As Reconstruction is planned from scratch and the project includes complex works, there is a need in to verify that the project and construction works were set correctly and all the required works have been included and its costs have been correctly estimated. The current status at the moment is disastrous, there is mold, water flowing everywhere, roof falls and an old electricity system. 57

58 Annex 8. M&E Monitoring visit First Line" Procurement Monitoring Report on: Sub-project pre-implementation and current implementation status Date of visit: June 07, 2013 Project Component: Filiere du Vin Credit Line Component Final Beneficiary (FB) name: First Line" SRL Monitoring visit place: Republica Moldova, mun. Chișinău şos.munceşti,801 Tel/ Fax Report prepared by: Valeriu Moraru, Filiere du Vin Credit Specialist Report Purpose of visit Monitoring visit Participants Partners, Beneficiaries and other stakeholders met: The purpose of the visit was to verify the procurement of Flexographic machine RELEX GEARLESS C.I. 800/8c 1) Valeriu Moraru, Filiere du Vin Credit Specialist Mr. Alexandr Duplov Director of Firstline LLC and mrs. Maria Caraman financial directod of Firstline LLC Information collected 1. The Flexographic machine RELEX GEARLESS C.I. 800/8c was purchased from EIB loan and now it is installed and checked by a foreign specialist. Also this specialist teaches Moldovan specialists how to work with this machine.

59 59

60 Also the Firstline representatives have shown the place where they began to construct buildings for storage of finished goods (from own resources from future sales). Conclusion Firstline respected the structure of the investment project and bought the equipment from EIB resources. In the future, the PIU team will verify the construction of buildings for storage of finished goods (from own resources from future sales).

61 Annex 9. M&E Monitoring visit Vinăria Zîmbreni" Pre-financing Inspection Visit Report at FB site Project Filiere du Vin, Component: Credit Line Final Beneficiary Name (FB): Date of Visit: Monitoring Place Visit: Monitoring Visit Participants: Purpose of Visit: Partners, Beneficiaries and other stakeholders met: Vinăria Zîmbreni SRL 07/June/2013 Ialoveni raion, Zîmbreni village. Valeriu Moraru PIU Credit Specialist FB has requested financing from EIB Credit Line to procure equipment for grape processing, for wine fermentation and storage, for automated cooling system and for renovation of processing building. The PIU decided to inspect the FB declared own contribution for the investment project processing buildings and technological equipment. Mr. Octavian Țurcanu Director of Vinăria Zîmbreni SRL. Report prepared by: Valeriu Moraru Part 1. Visit details /outcome The PIU team has performed an inspection visit (on 07/06/2013) within the existing processing buildings of Vinăria Zîmbreni SRL in order to get informed/collect info on the following: 4) Inspect the declared contribution of the Final Beneficiary to the investment project. 5) Inspect the premises where the production buildings will be renovated. 6) Collect photo materials on the existing situation to be used further as success story material The PIU representatives met with Vinăria Zîmbreni SRL director Mr. Octavian Țurcanu, who showed all the factory and the production buildings which will be renovated, etc. The following was inspected by PIU: 61

62 FB own contribution construction buildings: FB own contribution construction buildings which will be renovated from future sales:

63 FB own contribution wine making equipment: 63

64

65 Part 2. Conclusion As a result of the monitoring visit, PIU will request from the potential FB the contract of purchase of the production buildings. Annex 10. M&E Monitoring visit "Fautor "LLC Procurement Monitoring Report on: Sub-project current implementation status Date of visit: June 27, 2013 Project Component: Filiere du Vin Credit Line Component Final Beneficiary (FB) name: "Fautor"LLC Monitoring visit place: v. Tigheci, district Leova, Moldova Tel: Fax: fautor@fautor.md Report prepared by: Valeriu Moraru, Filiere du Vin Credit Specialist Report Purpose of The purpose of the visit was to: 65

66 visit 1) get acquainted with Sub-project implementation status - collect pictures from purchased goods, from cellar (which was built from EIB resources) and from production building (which was renovated from EIB resources); 2) Monitor implementation status of procurement contracts while these being implemented by FB. Monitoring visit Participants Information collected 2) Valeriu Moraru, Filiere du Vin Credit Specialist 3) Radu Cojocaru, Filiere du Vin Driver/courier On Sub-project implementation status - pictures were collected from FB sites, as follows: 1) The renovation of production building, which was realized through 4 contracts: a). Contract nr. 14 from with Saunord LLC; b). Contract nr from with Lacons LLC; c). Contract nr. 01 from with Eneia Grup LLC; d). Contract nr. 06/08 from with Murbatec LLC.

67 2) Construction of cellar for wine maturation, which was realized through contract Nr. 26/6 from with Orizont LLC: 67

68 3. Procurement of reception bunker (2 pieces), stainless steel platforms for tanks service, modernization of fermenters for red wines, which was realized through contract nr. 31/12-EX from with Smiit Company LLC:

69 4. Procurement of crushing machine which was realized through contract nr. CM from with Tecnofood Grup LLC: 5. Procurement of fermenters for red wines (10 pieces) which was realized through contract nr. 7 from with Toric Promet LLC: 69

70 6. Procurement of stainless steel tanks (2 tanks with capacity of 1000 dal, 3 tanks with capacity of 500 dal and 3 tanks with capacity of 300 dal) which was realized through contract nr C from with Berhord LLC:

71 FB own contribution from future sales FB planted about 20 hectares of vines, which was planned from own contribution from future sales: 71