WASHINGTON, March 22, 2016 — The World Bank Board of Executive Directors approved today an International Development Association (IDA)* credit in the amount of US$65 million in support of the Government of Madagascar to improve the country’s electricity sector governance and operations.
“The lack of adequate electricity access in Madagascar constrains the delivery of basic social services.It also makes it difficult to do business, which perversely affects the country’s investment climate,” said Coralie Gevers, Country Manager for Madagascar. “The Government has committed to work with the public electricity utility JIRAMA so it can fulfill its mission of providing energy efficiently and with higher standards of performance. We are committed to accompanying them on this journey which is only beginning.”
In Madagascar, access to electricity services is low countrywide by any standards. The estimated current electricity access is around 12-13 percent. Madagascar does not compare well with its peers in terms of energy consumption. For instance, consumption is at 46kWh per capita versus 52kWh per capita in Ethiopia, 92kWh per capita in Tanzania, and 105kWh per capita in the Democratic Republic of Congo. Besides, the electricity sector suffers from high losses and frequent power outages. Besides, JIRAMA, the state-run electricity utility, is under operational and financial stress.
“We’ve teamed up with the authorities in identifying a set of high priority activities that could be carried out in the short–to-medium-term to achieve significant improvements in the sector’s operations and governance. In the longer run, the actions identified aim to create the building blocks to attract sound private sector investments in generation and access to electricity in Madagascar,” said Isabel Neto, World Bank task Team Leader for the operation.
Some of the project’s key development objectives include the following:
- Improve electricity sector planning and financial sustainability. Such entails financing a combination of activities including technical assistance to develop strategic plans for sector development, roadmaps and capacity building that will ensure a greater determination of the optimum level of investments and tariff policies needed;
- Strengthen operational performance and governance of the state-run utility company JIRAMA through improved efficiency, transparency, and accountability in supply, commercial functions, and management of corporate resources; and
- Investments to enhance reliability of electricity. This will receive the largest share of investments i.e. US$48.62 million equivalent to finance priority rehabilitation and/or reinforcement of transmission and distribution networks in Antananarivo, and the upgrading of existing distribution systems in selected districts of the country in order to increase the reliability of the networks.
The project is consistent with the Government of Madagascar’s National Development Program and the sector policies recently approved. It’s in line with the conclusions of the World Bank Systematic Country Diagnostic, which informs the institution’s operational strategy for Madagascar, now called Country Partnership Framework (CPF), and currently under preparation.
* 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 77 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about $19 billion over the last three years, with about 50 percent going to Africa.