REPP’s investment in the Malile solar PV project represents a significant international contribution to Madagascar’s climate agenda, including the conditional NDC target (2016) for a 14% reduction of GHG emissions by 2030. It also supports the implementation of the government’s Madagascar Emergence Initiative (2019) and will add 42MW of new solar generation capacity, in line with New Energy Policy (2015) targets.
Three large-scale heavy fuel oil (HFO) plants in Madagascar are being hybridised with solar PV thanks to a USD 6 million bridge loan from REPP to developer Lidera Green Power (Lidera).
Currently, 75% of the country’s power is generated from expensive and high-emission HFO and diesel plants, but the government is keen to reduce dependence on fossil fuels and shift towards more sustainable sources. Hybridising fossil-fuel plants with renewable energy not only serves to mitigate emissions, but also makes single energy sources more climate resilient against supply disruptions and increases energy security through diversification.
The project, which is the first large-scale PV hybridisation of HFO plants in Madagascar, is being carried out in two phases in order to meet deadlines set out by the Malagasy government. REPP’s bridge loan financed the EPC costs of the first phase, with 2.4MW, 1.25MW and 2MW of solar capacity now operational close to the existing HFO sites in Diego, Mahajanga and Toamasina, respectively. This proximity to the HFO sites has enabled Lidera to take advantage of the existing infrastructure, significantly reducing costs and the environmental impact of the development. Power currently generated from these operational sites is being supplied to JIRAMA, the national utility company in Madagascar.
Under Lidera’s plans, a total of 10MW, 12MW and 20MW of solar PV will be installed at Diego, Mahajanga and Toamasina, respectively. The success of the initial phase is acting as a proof of concept to encourage other lenders to support the development and construction of the second and larger 36.4MW phase. Lidera is currently finalising studies on this next phase and is expecting to reach financial close in Q3 2024.
The project will reduce Madagascar’s reliance on expensive HFO, mitigate GHG emissions and provide job opportunities during the construction and operation of the plants.
Contracted date: 22 December 2020*
Lending type: Bridge loan
REPP funding: USD 6 million
* Financial close achieved on 30 July 2021
As the first large-scale PV hybridisation of heavy fuel oil plants in Madagascar, the Malile project is truly ground-breaking and once fully operational will significantly support the country’s GHG emission targets. REPP’s support has been instrumental in getting the first phase to commercial operation and helping to prove the concept to further lenders.- Tidiani Jeff Tall, CEO, Lidera Green Power