French President Emmanuel Macron heads to Madagascar on Wednesday, where power cuts, stalled dam projects and a troubled state energy firm are set to dominate the first visit by a French head of state in nearly 20 years.
The island is hosting the fifth summit of the Indian Ocean Commission, but energy reform is expected to be high on the agenda during Macron’s five-day tour of the region.
Only around a third of Madagascar’s 30 million people have access to electricity, according to the International Monetary Fund.
Power cuts often last more than eight hours a day. There is not enough electricity to supply water through public fountains in cities, reports RFI's correspondent Sarah Tétaud.
Poor governance of the state-owned utility, Jirama, is at the heart of the problem and there've been protests outside their headquarters in the capital, Antananarivo.
Madagascar is one of the poorest countries in the world, with 75 percent of people living below the poverty line. Yet Jirama uses up 10 percent of the state’s revenue.
"Our country's energy situation is unbearable," said President Andry Rajoelina at last year's Africa50 summit in Madagascar.
Mismanagement, corruption
"The financial burden is increasing by the second," he added, in reference to the $250 million (€220 million) the state injects into Jirama each year to compensate for losses caused by selling the kilowatt hour at 15 cents less than it buys from its suppliers.
Critics point to mismanagement and corruption as key factors behind Jirama’s failings.
"Public contracts and electricity production agreements are often awarded through opaque procedures," says Ketakandriana Rafitoson, executive director of the charity Publish What You Pay.
"I’m thinking in particular of the exploitative contracts signed between Jirama and the suppliers of diesel generators, which power most of the installations and are usually billed at exorbitant rates," she told RFI.
"Fuel suppliers, as well as generator renters, have every interest in prolonging the crisis. There’s also falsification of Jirama’s billing parameters, which leads to losses for the company itself."
Lack of transparency
Dams – even if some run dry for part of the year – are seen as key to boosting access to electricity, which in Madagascar is well below the African average of 50 percent.
But no major dam project has been built in the last 20 years. The Volobe hydroelectric dam on the Ivondro river in eastern Madagascar is expected to produce 750 gigawatts per year – enough to cover 40 percent of the island’s needs. It has been under discussion for nine years, but work is only set to begin in 2026, with the dam likely to be operational around 2032.
"In 2004, these dams – especially Volobe and Sahofika – were already listed among the government’s so-called priorities," Rafitoson said.
"The reasons cited for delays are funding issues, coordination, and governance, but I believe it’s primarily the latter – lack of transparency in public tenders – that holds everything back."
The Volobe dam is expected to cost €630 million. The European Union has already donated €20 million.
Previous discussions to get France's EDF electricity provider on board have failed, but there are hopes that Macron could announce EDF's participation, financed through a loan from the French Development Agency.
For it to be viable, however, Jirama has to be able to pay for the electricity.
Macron returns to Mayotte at start of five-day tour of Indian Ocean territories
"When you finance an energy production system – a hydroelectric or solar plant – you need a lender, but also an economic model that works," says Lova Rinel of the French Energy Regulation Commission.
"Madagascar has yet to figure out a financial and economic structure that proves the project will be profitable, and that this cooperation won’t be just another short-term project that runs for five or six years and then collapses due to lack of maintenance or local expertise."
The success of Madagascar’s energy projects therefore relies on reforming Jirama.
A recent report by the International Monetary fund concluded as much. "The state-owned utility, Jirama, struggles with inefficient production, high transmission and distribution losses, and tariffs below recovery costs," it wrote following a visit to the island.
The IMF said it was "essential" to implement an urgent recovery plan for Jirama.
This article has been adpated from the original version in French
