07 Aug 2020

Hard Negotiations in Progress Over Feed-in Tariff for Sahofika Dam in Madagascar

07 Aug 2020  by Agence Ecofin   

In Madagascar, the government is taking every precaution to determine an optimal buyout price for the production of the Sahofika hydroelectric power station. In fact, it wishes to achieve a price that is suitable for the purchasing power of its citizens, even if it means falling behind.

In Madagascar, the state buy-back price for electricity produced by the Sahofika hydroelectric plant could delay the start of works. Despite receipt of the environmental permit issued by the National Office for the Environment, the consortium made up of Eiffage, Eranove, Themis and Yesterday will not be able to start construction.

“The kilowatt hour price negotiations are still underway. The state is scrutinizing all the terms of the contract to see what could be most beneficial to consumers so as to avoid a hasty decision. It is a long-term project and the contract that we are going to validate will affect the lives of consumers for a few generations ”, tempered Andry Ramaroson, the director general of energy within the Ministry of Energy and Hydrocarbons.

The dam will have a production capacity of 192 MW and will supply electricity to the interconnected Antsirabe-Antananarivo network. Its construction will last 5 years and it will be operated for 35 years during which its owners will transfer its production to the Malagasy State.

“Certainly, the ceiling prices have been agreed. However, this should not be directly the price ceiling that will be imposed on end consumers. It is for the state to find a consensus of tariffs that will suit the purchasing power of the Malagasy, ” said the official, adding that obtaining a consensual tariff will determine the end of the process.

In the meantime, research for funding is already underway and the project has already obtained the support of partners such as the African Development Bank.

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