OPEC Fund advances clean energy and infrastructure in Madagascar with a total of US$65 million in new development financing

September 27, 2024: The OPEC Fund for International Development (the OPEC Fund) has signed two landmark agreements with the Republic of Madagascar, boosting support for sustainable socio-economic development and energy transition. A US$35 million loan will support the SMART Clean Cooking Project, while a US$30 million loan will help develop transport infrastructure through the Facilitation of Commerce Corridors Project (PACFC II). Both loans reinforce the OPEC Fund’s long-standing partnership with Madagascar. Signing took place during the annual meeting of Africa50, an investment platform established by African governments and the African Development Bank, in Madagascar’s capital, Antananarivo.

OPEC Fund President Abdulhamid Alkhalifa said: 

“By investing in clean energy and infrastructure, we are helping Madagascar address urgent needs while building a more resilient and prosperous future. These projects will have positive impacts on public health, economic growth and environmental conservation. A healthy population and a healthy economy go hand in hand.”

The SMART Clean Cooking Project is a critical initiative to introduce clean cooking solutions in Madagascar, where currently just 1.6 percent of the population have access to clean fuels. Some 72 percent of fuel is sourced from forests, of which 80 percent have already been lost. Meanwhile, indoor air pollution from traditional cook stoves causes 17,000 deaths every year.

The OPEC Fund-sponsored project will primarily target urban centers such as Antananarivo and Toamasina, where charcoal and firewood use is highest, and aims to benefit around one million people. By improving cooking infrastructure, promoting sustainable agroforestry and empowering local communities—especially women—the project will improve public health, reduce deforestation and enhance livelihoods.

Meanwhile, the US$30 million infrastructure loan will be spent on developing vital transport corridors in Madagascar’s southern regions, including the isolated Anosy and Androy areas, which are regularly hit by drought and famine. The improved infrastructure will provide better access to markets, healthcare and education for over 1.5 million people, significantly reduce travel time and boost trade flows. The project aims to stimulate local markets, particularly in agriculture, and improve living conditions in Madagascar’s most vulnerable regions.

The OPEC Fund also signed a Letter of Intent for the Promotion of Clean Cooking in Madagascar in collaboration with the African Development Bank, Africa50 and Madagascar’s Ministry of Energy and Hydrocarbons. This partnership will facilitate coordinated efforts to scale up clean energy solutions across the country.

The OPEC Fund's relationship with Madagascar dates back to 1976. To date, the OPEC Fund has approved 36 loans to the island country totaling over US$290 million, with projects across the energy, transport and other vital sectors.

About the OPEC Fund

The OPEC Fund for International Development (the OPEC Fund) is the only globally mandated development institution that provides financing from member countries to non-member countries exclusively. The organization works in cooperation with developing country partners and the international development community to stimulate economic growth and social progress in low- and middle-income countries around the world. The OPEC Fund was established in 1976 with a distinct purpose: to drive development, strengthen communities and empower people. Our work is people-centered, focusing on financing projects that meet essential needs, such as food, energy, infrastructure, employment (particularly relating to MSMEs), clean water and sanitation, healthcare and education. To date, the OPEC Fund has committed about US$27 billion to development projects in over 125 countries with an estimated total project cost of more than US$200 billion. The OPEC Fund is rated AA+/Outlook Stable by Fitch and AA+, Outlook Stable by S&P. Our vision is a world where sustainable development is a reality for all.