AmCham’s traditional Thursday Morning Round Table (TMRT) was held last week at Le Centell Antanimena. It was an opportunity for AmCham members to meet and discuss with Malagasy Minister of Energy and Hydrocarbons, Andry Ramaroson, about current energy issues. Following up on an interview given in the 14th edition of "The American" magazine, the Minister insisted on a couple of important matters, including other hydro initiatives than Sahofika and Volobe such as Ambodiroka, Ranomafana and Antetezambato. He also announced the implementation of a wind energy project in Antsiranana this year. The private sector, on their side, did not spare their words to express their concerns over the current situation.

Review of the situation

Minister Andry Ramaroson started by reassuring companies that Madagascar has sufficient stock of fuel until at least mid-June and that fuel prices will remain unchanged. The promotion of renewable energies and energy self-production are the objectives set by the current administration to tackle energy issues. As a reminder, the law adopted in 2017 allows companies to produce its own energy and sell up to 40 percent of its production.

On the other hand, the private sector expressed its worries about the financial health of JIRAMA. The Minister promised that the State company would regain its financial balance before the end of the presidential term in 2023. He also reassured companies that the "Optima Business" offer will be launched in the next two months.  Regarding their targeted production of 400 MW, 30 percent of the work is done, and it is estimated to reach 50% by the end of this year.

Looking to the future

Going green. The exploitation of Madagascar’s wind potential to increase Madagascar’s energy production capacity was brought to the table during the TMRT. Andry Ramaroson confirmed the project of wind turbine will be launched in north Madagascar this year.

Moving forward, he acknowledged that 400MW would not be enough to support the country needs in terms of electricity power in the coming years, with regards to the ambitious infrastructure projects envisioned by President Rajoelina. Electricity overproduction is not likely to happen anytime soon. But projects such as Sahofika and Volobe, and other projects are expected to build up new perspectives for Madagascar emergency. That is why the private sector is concerned with the slow advancement of those important hydro projects.

As we are heading to the 2023 presidential elections, the Minister of Energy and Hydrocarbons reassures the private sector that ongoing projects will not stop regardless of the outcome of the upcoming elections.

This last year, Madagascar has been affected by both the pandemic and natural disaster. The country still suffers the consequences of previous political crisis as well. During AmCham’s TMRT, he encouraged the private sector to further cooperate with the government. Any risk of political crisis following the elections is not to put aside. The main question is how this government can prevent the country’s development process from political crisis. Madagascar’s development, the emergency of the country and the viability of all developmental projects including investment security depend on political stability. Madagascar’s attractiveness also relies on present and future political decision. Maintaining political stability is therefore key to stimulate growth and development.

Among the members present: Madagascar Oil, Airtel, SOCOTA Group, Groupe Filatex, Rio Tinto QMM, Vivo Energy, Société Générale Madagasikara, Henri Fraise Fils & Cie, Rema Tip Top, Vision Madagascar (VIMA), Radisson Blu, Kolots'Art Aloalo, Bushproof, Fitzkara Associates, Ambatovy, and PriceWaterhouse Coopers. AmCham's next TMRT is expected to be held on May 26th.

By John Timothy Andrianaivo and Maherintsoa Andrianiaina