Following the passing of the Electricity Law, private investments are legally allowed in the energy sector, reflecting the objectives of the New Energy Policy for 2015 – 2030 to increase electricity access. No feed-in tariffs supporting the renewable energy development are currently in place and JIRAMA is considered reluctant or unable to buy independently produced power at favorable tariffs. IPP tariffs are negotiated on a contract-by-contract basis and are supervised by ORE.
Electricity Law (Loi 98 – 032 sur l’Electricité, 1998)
The Electricity Law established a comprehensive institutional framework for reforming the electricity sector and opened up the electricity market to operators other than JIRAMA. Through this Act, operators are recognized as owners of installations, as determined in the form of a Concession permit or Authorization permit, obtained either through a call for tender or by way of unsolicited application. The Electricity Law established the Agency for the Development of Rural Electrification (ADER) under the Decree 2002 – 1550 and the Electricity Regulation Board (ORE) as part of the terms of the Law 98 – 032.
The Law 2002 – 001 creating the National Electricity Fund (NEF)
The NEF is intended to finance rural electrification initiatives using grants provided to operators holding the requisite authorization or concession. A consumer tax of 1.25% on electricity bills for consumption above 20 kWh/month provides income for the NEF, creating capital to mitigate electricity tariffs for rural consumers.
The Law 2015 – 039 reforming Public-Private Partnerships
The State confirmed its determination to develop Private Public Partnerships (PPPs) particularly in the construction and rehabilitation of key infrastructure.
2015 – 2030 New Energy Policy (Nouvelle Politique de l’Energie – NEP)
The Government has created a New Energy Policy (NEP) for 2015 – 2030 within the framework of the National Development Plan 2015 – 2019. The New Energy Policy outlines several objectives, including: the provision of access to modern energy for 70% of households (equivalent of 7,900 GWh) via 70% grid extension, 20% mini off-grid, 5% SHS (Solar Home System) and 5% solar lamps; 85% of the country’s energy mix to come from renewables by 2030 (75% hydro, 5% wind, 5% solar), and; the implementation of energy efficiency measures by 60% for businesses and industries.
Improvement of Governance and Operations in the Electricity Sector Project (PAGOSE)
With the support of the World Bank, the Government of Madagascar is initiating reforms and carrying out priority investments for the recovery of the electricity sector through PAGOSE. The project includes priority actions in three interlinked areas: governance of JIRAMA, financial planning and sustainability of the Electricity sector, and reliability and continuity of service.
Economic Development Board of Madagascar
The Economic Development Board of Madagascar (EDBM) is the one-stop shop for the administering and establishment of all investment projects. The EDBM certifies eligibility for companies to benefit from the special regime for Free Zone Companies, and grants authorization for foreign investors to acquire land (though land lease titles must still be granted by the Ministry of Land Management). For other necessary authorizations, licenses and permits, the EDBM acts as the interface between the investor and various agencies and institutions, though these agencies and institutions retain decision-making authority.