AmCham’s editorial team had the opportunity to speak to the Minister of Energy and Hydrocarbons, Andry Ramaroson, where they could talk about Madagascar’s commitment to energy transition. As a reminder, COP26 happened in Glasgow, Scotland in November 2021 that President Rajoelina in person and former Minister of Environment and Sustainable Development Baomihavotse Vahinala Raharinirina attended. Despite a quite large Malagasy delegation, Andry Ramaroson was absent from that highly-expected event. He explains that his presence in Madagascar was essential and that Madagascar was well-represented enough.

Could you tell us briefly where Madagascar stands now in its energy transition which was among the commitments that the country made during COP26?

First of all, I would like to stress that the government conducts its work in accordance with the principle of continuity of the State. So, please let me start with a few statistics first. Our President has the vision to produce a minimum of 800 to 1,000MW by the end of 2023, compared to 450 to 500MW earlier. The electricity that we are using now is mainly generated by fossil fuel-powered energy plants. Now that we are talking more about energy transition, we must define what it is first. To the MEH, it is not the use of solely renewables but the shift towards the use of renewables. By the end of 2023, all the thermal centrals must all be hybrid. Concretely, if we produce 100MW from 100 percent thermal source, by the end of 2023, Madagascar should be able to produce 100MW from thermal source of energy and 100MW from renewable sources of energy, such as hydro, and especially solar because solar energy projects are easier to implement and can be achieved in one presidential term.

We must assess our potential in the energy mix. Sahofika was signed 2021, and it was seen as a key solution to power supply and expensive energy. However, the objectives set by Sahofika cannot be reached in one political term. We must be technically and politically cautious. Following the Andekaleka incident in January, we lost 90MW. While the population complained about longer power cuts, they did not see that it cost Jirama a loss of 50 billion Ariary a month.

Speaking of Sahofika and Volobe, the private sector is highly concerned about the blockage. Could you please explain where we are now with these projects?

First, I am interested to know where the private sector stands in these two projects. Are they seeking to maximize public interest or only their own benefit? I think they are seeking both. That is fair because private investors come with the funds. However, it is less fair to oblige the government to sign an agreement where a more satisfying deal can still be negotiated. At the very beginning, Sahofika could provide electricity for 7 cents per kWh. If we signed the contract at that time, we would have lost 2 to 3 cents per kWh. With better deals, the whole country will be able to enjoy quality and affordable energy. I can understand how impatient the private sector is. But I fail to understand why the private sector focuses on Sahofika and Volobe when other projects such as Ambodiroka, Ranomafana, Antetezambato are in progress as well. We must consider more parameters. These projects have the potential to boost local economies. I am not blaming the private sector; I am just drawing their attention on these important parameters. I am still wondering what role the private sector does play here.

Cumbersome procedures – both local and international – also delay the implementation of these projects. These million-dollar fundings come from different institutions governed by their own procedures. We must be cautious with regards to these technical aspects. When I took office in 2019, only an MoU was drafted. In 2021, we reached and signed an agreement. That is to say how impressive the progress we made was in only three years. Signing Sahofika was a huge step. However, let us not forget smaller-scale projects involving other actors in the private sector.

Do we have technical skills to handle energy transition projects?

Yes and no. We do have skilled human resources but only at a certain limit. Our engineers and technicians have the needed skills. However, we do not have a culture. In this case, we import expertise to manage huge projects. Smaller projects of 250 or 350 kW are led by Malagasy people. The challenge lies in the leadership, especially when multiple decision-makers are involved at the same time.

Why such focus on solar energy?

Despite a few ongoing projects, we do not really explore wind energy in Madagascar because of our limited potential. As a technician, I am not personally convinced with the exploitation of wind energy in Madagascar. I am not leaning on wind projects. Hydro and solar are my trumpeted causes. You may wonder why focusing on hydro while the country faces water problems. We do not have water problems; we do have water management problems. These are two different things.

Do investors trust in Madagascar?

As a member of the government, I can tell you investors trust the Malagasy government. I am not saying that all is well. We have many challenges still left to overcome. I keep saying investors not to compare their practices in their countries and those in Madagascar where the context is totally different. Even aware of the challenges of doing business in Madagascar, many investors still demonstrate their commitment to working with us. The challenges are real, but are meant to be overcome. It is my responsibility to establish an environment of confidence and trust.

Malagasy companies seem not to know what energy transition really is. What efforts has the Ministry made in this regard?

I acknowledge that we still have a long way to go in this regard. My Ministry must make more communication efforts. In the next coming weeks, a dialogue between the public and private sectors will be open to explain what energy transition is and what legal provisions are applicable. The Ministry’s door remains open to whoever partner is willing to collaborate. I am planning to hold a regular dialogue with the private sector on a quarterly basis, even virtually. Every Thursday, I welcome anyone who wants to speak with me personally.

Your message to the private sector?

If at some point, a company has any issue, doubt, or concern, reach out to me personally, even without a formal meeting request. My door remains open to the private sector.

Are we ready for energy transition then?

The government is ready; but we cannot walk alone. We need the private sector’s support. There is a solution to any problem. There is an explanation to any unclear information. We acknowledge the lack of expertise. We acknowledge that sometimes there can be misunderstandings. The Energy law may not be adapted to the PPP laws and sectoral laws. But these are challenges that can be solved through dialogues. Dialogue is essential.