Madagascar: AfDB Approves \?6 Million Investment in Sahanivotry Hydroelectric Power Station

press release

Tunis — The African Development Bank (AfDB) has approved a  € 6-million private sector investment in the Sahanivotry hydroelectric power station in Madagascar. The investment, approved by the Board of the AfDB on Thursday in Tunis, will provide part of the funding to enhance the installed capacity of JIRAMA, the state corporation that generates and distributes electricity in Madagascar.

The project comprises the construction of a hydroelectric power station with an installed power of 15 MW, including the supply and installation of all the necessary equipment as well as accessories for its operation. for a 30-year period in response to JIRAMA's needs.

The project also involves the construction of access roads, some bridges, a water intake structure, a water retention pond, a penstock with a hydraulic head of 243m, a power generating station, a transformer and a 63 kV power line to connect the power station to the JIRAMA power grid in Antsirabé.

It will have a significant impact on the country's development. It will make it possible to increase electric power output by more than 10% in the country at a competitive cost that is 50% cheaper than electricity generated from diesel plants. Furthermore, the activities implemented by the investor (roads, plantations) will stimulate the economy of the project area.

The project will create 140 jobs during the construction phase, including at least 40 local jobs, 20 permanent positions and several short-term job opportunities for the local population during the operational phase. The project will also encourage direct and indirect procurement of goods and services supplied locally. For example, local quarries will be used. Hence, its impact on the local economy will be of average importance and last all through the life of the project.

Another positive impact is the road construction which opens up access to the two neighbouring council areas of Farihitsara and Lahimbo, giving them easy access to markets.

Moreover, the regular supply of electricity to the village will boost small and medium-size industries such as hulling, milling and activities related to the operation of the dam.

It will also contribute to improved living conditions in the area..

The total cost of the project, is estimated at between -12.1 million and -14 million including VAT. The Bank's contribution represented 43% of total project costs. Two local Banks, BFV (affiliate of Sociéte Générale) and UCB (Union Commercial Bank) will invest -3.4 million in the project.

* UA 1 = USD 151286 = MGA 294. 39 as at 05/07/2007

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