World Bank approves $10 million loan to Madagascar for power/water

• Move supports power/water sectors recovery and restructuring project with US$10 million credit line.

WASHINGTON, July 13, 2006 -- The World Bank Board of Executive Directors today approved an International Development Association (IDA) credit line of US$10 million to help restore the power/water utility in Madagascar to a minimum level of operational and financial performance.

The Power/Water Sectors Recovery and Restructuring Project will support the progress made in the reform agenda and the future role of the energy and water sector as engines of growth and the government of Madagascar strategy which articulates, inter alia, the main goals of the reform program as its commitment to the public-private partnership and the implementation of cost-reflective tariffs.

This credit supports the first phase (APL 1) of a longer term assistance program or Adaptable Program Lending (APL) aimed at financing needed infrastructure investments and facilitating the government reform process towards a JIRAMA (Jiro sy Rano Malagasy, Electricity and Water of Madagascar) operated according to best practice under a Public Private Partnership (affermage). The effort is further supported by the IFC transaction advisory team assisting the government in the process of selecting and contracting a suitable private partner for the Utility.

"The Bank supports the decision of the Government, to launch a set of comprehensive reforms, going beyond the interim step of a management contract, to resolve the utility's poor and declining performance," said Erik Fernstrom, the World bank Task Team Leader for the project.

"The Bank has established a very constructive dialogue with the Government over the last three years and has been working closely with other key partners in the sector to ensure that long-term sector investment would continue to be financed" said James Bond, the World Bank Country Director for Madagascar.

This APL-1 will also provide funds for preparatory studies needed to build up a pipeline of future APL-2 investments and guarantees.

For more information on the World Bank's work in sub-Saharan Africa, click here.

For more information on the World Bank's work in Madagascar, click here.

For more information about this project, click here.

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Also see: "World Bank supports wastewater treatment services in Tunisia"

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