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Hybridisation project progressing in Madagascar

REPP-supported solar hybridisation project in Madagascar progressing well

A ground-breaking operation to hybridise three heavy fuel oil (HFO) plants in Madagascar with solar PV is underway thanks to a USD 6 million bridge loan from REPP.

Currently, around three quarters of Madagascar’s power is generated from non-renewable sources, such as HFO and diesel plants. Hybridising fossil-fuel plants with solar not only serves to reduce emissions, but also makes single energy sources more climate resilient against availability of supply and increases energy security through diversification.

Developer LIDERA Green Power’s project is aiming to address this problem by adding 42MW of solar PV to hybridise three HFO plants and is the first large-scale project of its kind in the island country.

The project is expected to deliver socio-economic benefits to Madagascar’s economy and population by reducing the country’s reliance on expensive HFO and providing job opportunities during the construction and operation of the plant.

To date, the developer has installed 2MW of solar PV panels in the city of Toamasina, and a further 1.25MW in Mahajanga. Work to install a further 2.4MW at a third plant in Diego is underway and expected to be finished in Q4 2021.

REPP’s loan has enabled LIDERA to fund the construction of the first phase of the project and provide a proof of concept to encourage other lenders to support the development and construction of the second and much larger phase. The second phase is expected to begin in Q2 2022, bringing the total capacity installed to 10MW, 12MW and 20MW at Diego, Mahajanga and Toamasina, respectively.

Geoff Sinclair, Managing Director of Camco Clean Energy, which manages REPP, said: “Heavy fuel oil plants are an ecological disaster and bring with them a considerable cost burden that very often stifles economic growth.

“In response to LIDERA’s need we were able to design a suitable financing structure that has not only enabled the company to move quickly ahead with its plans, but which is replicable to all other HFO plants across Madagascar.

“We hope that this landmark deal will now pave the way for many similar projects providing lasting environmental, social and economic benefits to the Malagasy people.”

Find out more about the project here.