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Project Brief

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.


Project name
Hydelec Madagascar S.A.
Project ID
Fiscal year
Not Active
Guarantee holder
Energy Engineering Investment Limited
Investor country
Host country
Environmental category
Gross exposure
 $19.8 million
Project type

MIGA has issued a guarantee of $19.89 million to Energy Engineering Investment Limited of Mauritius, covering its equity investment in and shareholder loans to Hydelec Madagascar S.A. The coverage is for up to 15 years and covers the risks of war and civil disturbance, transfer restriction, and expropriation.

The project consists of financing, building and operating a run-of-river 15 MW hydro power facility located on the Sahanivotry river, 30 km south of Antsirabe, in the province of Antanarivo in Madagascar. The facility will function as a base load plant to feed the Antanarivo and Antsirabe grid, which suffers from chronic power cuts and load shedding. The expected generation cost of 4.8 c/kWh is lower than the cost of electricity currently produced by many existing thermal power plants.  

The project will be implemented under a 30-year concession agreement. Electricity generated will be sold under a 10-year power purchase agreement signed between JIRAMA—the state-owned electricity company—and the project enterprise. 

In the past five years, demand for electricity in Madagascar has grown at an annual average rate of approximately seven percent. The project is expected to help the country meet its increasing demand for power reliably and in a cost-effective and environment-friendly manner. This is the country’s first privately owned and operated hydro power project and is expected to pave the way for similar investments in the future.

The hydroelectric power plant is expected to generate up to 70,000 MWh of power per year, thereby reducing Madagascar’s reliance on more expensive thermal power plants, as well as more expensive imported fuel. Downstream effects of the project are expected to include benefits to trade and tourism, as well as the agricultural and industrial sectors due to reliable electricity supply. Continued expansion in energy and electricity supply is also likely to help sustain greater economic growth in the country. The project has the potential to pave the way for attracting additional private capital investment flows for infrastructure development in Madagascar.  

Electricity sector reform in Madagascar is an important priority for the World Bank.  The government of Madagascar has identified hydro power generation as the preferred method of electricity generation for the country, given the abundance of smaller rivers throughout the country. The project is, therefore, consistent with the Bank Group and the government’s strategy in Madagascar.

MIGA previously provided coverage for a 5MW thermal power plant in Madagascar, developed by the same investor.  The project has been producing electricity since July 2000.


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