Helping Madagascar develop its power supply
The Sahofika power plant will bring affordable electricity to more Malagasy people and support economic growth for the island country in the Indian Ocean.
In November 2021, public officials signed a concession agreement, giving a private company the right to operate the publicly-owned and future 200 megawatt hydropower plant.
Sahofika is expected to be the country’s largest hydroelectric facility, generating enough energy to power about 1.6 million households. The infrastructure will consist of a 60-metre-high water dam on the Onive river, forming a reservoir of about 9 km².
“Sahofika is great news knowing that only 15 to 20% of Madagascar’s population has access to electricity” says Clara Kayser-Bril, head of the Power Advisory practice at CPCS.
The project was developed in agreement with the communities residing in the neighboring municipalities according to the highest environmental and social standards.
Innovative risk sharing mechanism
With the support of the African Legal Support Facility (ALSF), transaction advisors for this contract consisted of CPCS as the technical advisor, Finergreen as the financial advisor and Trinity International LLP as the legal advisor.
CPCS provided a framework for handling the technical negotiations in a rational and systematic manner. CPCS experts provided recommendations that were tailored to the needs and desires of the Government of Madagascar. This included developing an innovative risk sharing mechanism that mitigated hydrological and geological risks for both the Government of Madagascar and the project’s investors.
CPCS will continue to assist Madagascar’s government in remaining negotiations for this project up to financial close, including operations, maintenance and cost optimization.
“Once Sahofika is built, it has the potential to change the power landscape for the entire country,” says Clara.
Madagascar will continue to develop new energy infrastructure with an emphasis on renewable energies.
Clara Kayser-Bril is a power specialist at CPCS, a global management consulting firm specializing in transportation and energy.
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