WASHINGTON, June 14 - The World Bank approved today an International Development Association (IDA)* credit of $40 million to improve Madagascar’s electricity sector governance and operations.
The Madagascar Electricity Sector Operations and Governance Improvement Project (EGOSIP) will help ensure full implementation of the Performance Improvement Plan of JIRAMA that has been prepared in 2016, in particular, the organizational restructuring of the company. This project will also finance the upgrade of JIRAMA’s dispatch center and network automation systems and rehabilitation and reinforcement of distribution networks, in order to improve quality in electricity supply and allow the integration of variable renewable energy generation.
“Although Madagascar has made encouraging progress in improving the country’s power sector performance in recent months, efforts to enhance the financial and operational performance of JIRAMA and to transition to renewable energy need to be consolidated and scaled up,” said Coralie Gevers, World Bank Country Manager for Madagascar. “The Government has shown commitment to transform the public electricity utility JIRAMA. We are equally committed to accompanying them. This project is a vital building block of the World Bank’s long-term engagement to address the sector’s challenges in a holistic manner.”
Madagascar’s social and economic development continues to be constrained by the lack of reliable electricity services. Only 15 percent of the population had access to electricity in 2016 (39 percent of the population in urban and peri-urban areas and only about 5 percent of the population in rural areas). Madagascar continues to perform poorly on the Doing Business Report 2017’s ‘Getting Electricity’ indicator, ranking 185 out of 190 countries, with applicants waiting an average of 450 days to get an electricity connection.
The investments would allow JIRAMA to reinforce transmission and distribution networks not only to reduce technical losses, but also to support the implementation of the national electrification strategy via grid densification to increase electricity access rate in the country. Moreover, preparatory studies and technical assistance will be provided for the development of priority small hydropower projects to reduce generation costs.
“Strengthening the operational and financial performances of JIRAMA is at the heart of sustainable development of the power sector - to scale-up electrification and enable private investments as a reliable off-taker. There are also now significant opportunities to transition to a lower carbon path and to improve the financial viability of the sector in a sustainable manner,” said Vonjy Rakotondramanana, World Bank Task Team Leader for the operation.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 75 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.5 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $18 billion over the last three years, with about 54 percent going to Africa.