In the 13^th edition of The American magazine, Romy Andrianarisoa Voos, as a representative of the private sector within the GEM[1], put a stress on the critical role of the private sector in the fight against climate change. Energy transition is a key component of the commitment made by Madagascar last November during COP26. Just to recap, Romy stated that Madagascar would take a made-in-Mada path in its energy transition where fossil energy will not be banned.

How is Madagascar’s energy mix going to look like?

The strategy is clear. Madagascar will lean on fossil energy sources and renewables. However, in the absence of the exact data about the reserves of fossil fuel in Madagascar, we are unable to define the ratio and the timeline. Our transition will need significant fundings.

If we look at the fossil and oil industry, a couple of issues must be addressed. Effective revisions of oil and mining contracts are key to ensure Madagascar’s competitiveness. Then, securing these investments must be part of the government and all public institutions’ vision. A coherent set of policies to structure the energy sector must be adopted, including an appropriate capacity-building policy for Malagasy experts. Madagascar does have a very low number of oil and gas engineers, and importing expertise has become a mandatory stage. The vision that the extractive industry can be a lever for sustainable and inclusive development must be shared by all policymakers. Good governance is then essential. The boom in the energy sector should be felt at the levels of other related industries – food, marine, etc., and at the level of the population, the heart of the impact.

If we look at the renewable energy sector, we are on our way to promote greener energy. We are blessed with 365 days of sunshine. Hydro projects like Sahofika and Volobe are huge but still, securing investments must be made a priority. The deployment time frame of such big projects must be made clear shortly after signing the agreement.

Why is priority given to solar energy?

First of all, unlike heavy projects such as Sahofika and Volobe, implementing solar energy projects does not require a lot of advanced technologies. Solar energy proved to work immediately. Wind energy could work in Madagascar but also needs huge investments that require a certain level of security. In Glasgow, we talked about hydrogen as well. Unlike in countries such as Australia, Namibia or Germany, hydrogen projects are still at a nascent stage in Madagascar. All these options should be considered in the energy mix. Our energy policy must be as flexible as possible. The majority of our population is based in remote places with no access to electricity. Our potential in solar and renewable energy must be explored as much as possible.

How does our legal framework support the promotion of investments in the energy sector?

We acknowledge that there are efforts made by the EDBM and the MEDD to secure investments in Madagascar. However, the process remains sadly slow. With the pandemic and the current crisis in Ukraine, we are more than ever aware that Madagascar must be energy independent. However, the criteria to promote investments in Madagascar are not met yet. The call for expression of interests in investing in oil blocks in Madagascar must be transparent and competitive. The OMNIS must provide investment incentives.

Madagascar must revise the Mining Code, the Investment Code, and the Petroleum Code. The extractive industry must be exempted from VAT to make the sector more competitive. Madagascar runs out of expertise to implement renewable energy projects.

It is acknowledged that Madagascar was granted a 50-million-dollar funding from the World Bank to finance its climate change adaptation plan conducted by the government through the MEDD. Surprisingly, the operationalization of all those initiatives struggle to kick off, and we really wonder why.

How do the private sector and public institutions collaborate to support Madagascar’s energy transition?

All energy projects must be done in a PPP framework. Access to energy is a government priority. The management of our natural resources belongs to the Government. We have a national energy policy, but we do not have the expertise. That is where the private sector intervenes. A very important point to note is, we must ensure that the fiscal, economic and environmental impacts of those investments benefit the population.

In late 2021, the private sector raised their voice regarding the slow evolution of Sahofika and Volobe. Do you understand where the blockage is?

Despite the lack of expertise in decision-making, the private sector has shown its readiness to invest. Everything is there, the decision belongs to the Ministry. The private sector seeks to understand what is blockage in the implementation of such big investment opportunities. The signal that Madagascar sends to investors is that signing an agreement does not necessarily mean a will to take concrete actions. Let us work and translate our commitments in Glasgow into concrete actions. All the tools are here. Now we must move forward.

Do Malagasy companies understand what energy transition is?

First and foremost, Malagasy companies’ appropriation of all SDGs is of paramount importance. They must understand what energy transition is; unfortunately, that is not the case yet. They must understand the process of shifting towards the use of greener energy. They must be accompanied and supported on how to deploy energy projects conveniently.

Simply moving towards the use of solar energy is not what is called energy transition. It is also about the use of a greener production process, an integrated waste management, and the use of machines using green energy. It is a matter of circular economy. We must understand that energy transition is a 360-degree approach that requires strong capacity building. And that is where TF261 intervenes. That is why strategic meetings at the regional level are important.

Your message to the stakeholders in the energy transition?

We have seven years left to reach the SDGs. It is urgent that Madagascar and the Indian Ocean islands set sub-regional blue economy strategies, carbon offset strategies, and turn climate change as business opportunities. If the private sector does not see business opportunities in the energy transition, then its appropriation would be very difficult. “Sustainability” must be a watchword, and that is where the government can provide its support.

[1] Groupement des Entreprises de Madagascar, where Romy is the President of its Sustainable Development and Business Ethics Commission (DDEA)