Project General Description
This Sahofika 192 MW Hydropower Project Partial Risk Guarantee aims to provide a partial guarantee of the risk of non-payment by JIRAMA. The Sahofika Project consists of the design, construction and operation of a 200 MW hydroelectric power plant on the Onive River, 100 km southeast of Antananarivo (Madagascar). Hydraulic and civil engineering works will eventually increase the capacity to 300 MW. The project also includes the construction of a 63 km transmission line between Antananifotsy and the site, a camp near the power plant, and 6 km of access roads. Construction is expected to take five years. It is expected to produce approximately 1,570 GWh per year. The power plant guarantees a base load capacity of 192 MW (95%), including during the dry season. However, the civil works are designed to allow for an extension to about 300 MW at lower cost. The project is being developed under a Build-Operate-Own-Transfer (BOOT) contract which provides for the design, financing, construction, operation and management of the hydroelectric plant under a 35-year concession agreement and a Power Purchase Agreement (PPA). The concession agreement will be concluded between the project company - Nouvelle énergie hydroélectrique de l'Onive (NEHO or the project company) - and the Malagasy State represented by the Ministry of Water, Energy and Hydrocarbons, while the PPA will be signed between the National Water and Electricity Company of Madagascar (JIRAMA) and NEHO.
The objective of the ADF Partial Risk Guarantee (PRG) is to provide risk mitigation to the private developers and the debt providers to mitigate the payment risk of the off-taker (JIRAMA). Specifically, the ADF PRG provides credit enhancement by covering the equivalent of six (6) monthly NEHO’s billing to the JIRAMA.
The beneficiaries of the project are the State of Madagascar, the Water and Electricity Company of Madagascar (JIRAMA) and ultimately the Société Nouvelle Énergie Hydroélectrique de l'Onive. In addition, the project is expected to create more than 1,000 temporary jobs during construction and approximately 50 permanent jobs over the plant's 35 years of operation.