The objective of the study is to: (i)assess the adequacy of the existing heat and electricitytariff levels for achieving financial viability of theenergy sector operators; (ii) analyze the distributionalimplications of energy tariff increases; and (iii) assessthe effectiveness of the existing social assistance programsand how to adjust them to mitigate the impact of energytariff increase on the poor This report presents the keyfindings and recommendations for the Government of Moldovaas well as other energy sector stakeholders. The reportstarts with a synopsis that summarizes the key findings andrecommendations. The main report section starts with anintroduction to country context, presents the design oftariff setting methodologies, and assesses the adequacy oftariffs based on constructed scenarios. Thereafter analysisof the distributional impact of projected range of tariffincreases and the need to adjust the social assistanceprograms to mitigate the impact on the poor are presented.The report concludes with recommendations for the governmenton actions to be implemented on tariff setting methodologiesand social assistance as well as areas for further research.Appendices include further background information of the analysis.