Pursuant to art. 40 of  Law on Public Finance and Fiscal Responsibility No.181 of July 25, 2014, capital investments funded from the state budget and local budgets are planned, executed and reported as an integral part of the state budget or local budgets, respectively.

Public authorities shall ensure, as appropriate, the initiation, planning, examination, approval, implementation of the relevant capital investment projects, as well as monitor and report on their level of implementation and performance.

Government Decision „On Public Capital Investment” No.1029 of December 19, 2013 establishes a transparent and efficient mechanism for the preparation, approval, implementation, monitoring and evaluation of capital investment projects financed from the national public budget.

The purpose of this Regulation is to establish a transparent and effective mechanism for the preparation, approval, implementation, monitoring and evaluation of capital investment projects financed from the national public budget (hereinafter referred to as " the budget").

Starting from the normative framework, the initiators of capital investment projects are central public authorities, local public authorities and subordinated institutions.

The principles of resource allocation for capital investment imply the following:

1. Allocation of resources primarily for the completion of ongoing projects;
2. New capital investment projects must result from the priorities of the Government/local public administration authorities, set out in the strategic planning documents.

The capital investment project cycle includes the following steps, that are mandatory for all projects, regardless of their type and size (Annex No.1):

1. Project identification and preliminary assessment;
2. Preparation of the project documentation;
3. Funding examination and approval;
4. Implementation and monitoring;
5. Final assessment.

In the context of the budget process, capital investment planning involves:

Establishing the general limit for capital investment expenditure;

The analysis and evaluation of the existing portfolio of capital investment projects;

The identification of priorities for capital investment;

The determination of capital expenditure limits.

The instruction on the management of capital investment projects aims at regulating the methodology of identification, preparation, approval, preliminary assessment and reporting of capital investment projects, preparation of project documentation, examining and approving the financing of capital investment projects from the national public budget and determining the responsibilities of the parties involved in the running of the project cycle.

It is worth mentioning that the reform of public capital investment management was initiated with the support of the World Bank. Currently, this reform is supported by the EU Technical Assistance Project for Improving Public Finance Management Reform in the Republic of Moldova.

The relevant normative acts were elaborated under the continuous assistance of the World Bank experts.

The Ministry of Finance appreciates the support of the World Bank and the European Commission, and seeks to further develop this collaboration.