AfDB Funds Madagascar’s Sahofika Hydropower Project
The African Development Bank (AfDB) has approved a €4 million loan with a grant component that will finance Madagascar’s €30 million equity investment in the Sahofika hydropower project.
The hydropower project – located on the Onive River, 100Km southeast of the capital Antananarivo – is expected to generate affordable, clean energy that will benefit approximately 8 million people. The project involves the development of a build-own-operate-transfer 205MW hydroelectric power plant, which requires the construction and rehabilitation of 110Km of access roads. It also includes the construction of a 75Km, 220 kV transmission line. Once completed, the Sahofika project is expected to contribute to the prevention of 900,000 tons of CO2 equivalent annually.
“The support to the Sahofika project exemplifies the Bank’s commitment to delivering quality, affordable energy access across the continent for sustainable and inclusive growth, while helping member countries to responsibly harness their vast, yet underdeveloped renewable energy resources. As the largest hydropower project under development in the country, the Sahofika project will unlock Madagascar’s hydropower potential, and diversify its energy mix in favor of renewable at 90%,” said Dr. Kevin Kariuki, AfDB’s Vice-President for Power, Energy, Climate Change and Green Growth.
The European Union and the Arab Bank for Economic Development in Africa will provide additional funds for the project. The government of Madagascar has vowed to plough back the project’s returns to reduce energy prices for its citizens.
“The Sahofika project is a cornerstone of the Bank’s strong support to the power sector in Madagascar. The commissioning of Sahofika would enable national utility to save around €100 million annually in fuel costs, while phasing out the need for state subsidies,” said Mohamed Cherif, the Bank’s Country Manager for Madagascar.
The Sahofika project is associated with the Bank’s New Deal on energy for Africa and the Bank’s Climate Change Action Plan, whose common goals involve developing renewable energy resources for productive and inclusive development. It also fits in with the government’s energy policy.