Project Description

This summary covers an investment by QIT Madagascar Minerals Ltd of Bermuda for one of six generator sets within a power plant, as well as associated transmission facilities to supply power to the town of Fort Dauphin in Madagascar. The investors have applied for a MIGA guarantee of $3.3 million for a period of up to 10 years against the risk of breach of contract.

QIT Madagascar Minerals S.A. (QMM) is 80 percent owned by Rio Tinto through QIT Madagascar Minerals Ltd. QMM is developing an Ilmenite mine with associated port facilities in Madagascar. Power supplied by the state-owned utility, JIRAMA, for QMM’s mining operations is insufficient. Therefore, QMM is building its own power plant and installing five generators that will supply power for its mining operations to the Port of Ehoala.

QMM is also installing and operating an additional generator (the sixth) in order to address power shortages in the town of Fort Dauphin. Electricity generated will be sold to JIRAMA under a 10-year power purchase agreement signed with QMM. 

This project falls within the scope of a larger World Bank-supported project—the Integrated Growth Poles Project for Madagascar. Click here for documents related to the project.

Environmental Categorization

The project is a Category B under MIGA’s environmental review procedures.

Development Impact

Fort Dauphin falls within one of Madagascar’s poorest areas with GDP per capita of $180. Access to electricity by Fort Dauphin’s estimated 360,000 inhabitants is scarce and sporadic (estimated at 31 percent). Load shedding and electricity shortfalls are having an adverse effect on the local economy. The project is expected to provide sufficient electricity to meet the current needs of Fort Dauphin and contribute significantly to the area’s development. In general, the project is expected to contribute towards increasing power supply in the country reliably and in a cost-effective manner.