Electricity as a driver of development

Project description

Title: Promotion of rural electrification through renewable energies
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Madagascar
Lead executing agency: Ministry of Water, Energy and Hydrocarbons (Ministère de l’Eau, de l’Energie, et des Hydrocarbures - MEEH)
Overall term: 2015 to 2020

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Context

In Madagascar, only 15 per cent of the population has access to electricity. In rural regions, which are home to more than two thirds of the population, this figure drops to just 6 per cent.

Most households use fuelwood, kerosene lamps, candles, coal or diesel generators to meet their energy needs. Institutions that are affected by the limited availability of energy include schools and health centres. The inadequate energy supply is also putting a significant brake on the country’s economic development.

Objective

Stakeholders in the energy industry use the improved institutional and financial framework conditions for investments in electrification through renewable energies.

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Approach

Improving the general investment climate is an essential step in making Madagascar’s electricity sector more attractive to investors. The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH works with stakeholders such as the Ministry of Water, Energy and Hydrocarbons (MEEH), the Board of Electricity Regulation (ORE) and the Rural Electrification Agency (ADER). It uses the programme to contribute to the following measures:

Improved transparency and regulation through legislation, introduction of an energy information system, digitalisation of processes and development of grid connection conditions.

  • Optimised awarding of concessions and funding for rural electrification through new tendering procedures, and support in establishing the National Fund for Sustainable Energy (FNED).
  • Training of experts and transfer of knowledge and expertise on the economic use of renewable energies.

Results

  • Since August 2019, a public energy information system has been allowing access to information, supporting investment decisions and contributing to greater transparency.
  • The revised electricity law promotes investment. Since its introduction, more than 100 new companies have been founded.
  • Since 2019, independent power providers have been able to insure their business models via the Regional Liquidity Support Facility (RLSF) of the African Trade Insurance Agency (ATI).
  • As a result of the first two rounds of bidding on rural electrification, development rights have been granted for projects in various regions. The projects are designed to provide a sustainable energy supply to a total of more than 60,000 households over the next three years.
  • The negotiations for two hydroelectric power stations are almost complete, which will enable the current electricity production of 550 megawatts to be doubled.

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