Announcement of Madagascar: World Bank Supports Power and Water Sectors Recovery and Restructuring Project with US10 Million Dollars Credit on July 13, 2006

Madagascar: World Bank Supports Power/Water Sectors Recovery and Restructuring Project with US$10 Million Credit Contacts In Washington: Aby Toure (202) 473 8302 akonate@worldbank.org; In Madagascar: Jocelyn Rafidinarivo (261-20) 225 6000 jrafidinarivo@worldbank.org WASHINGTON, July 13, 2006 – The World Bank Board of Executive Directors today approved an International Development Association (IDA) credit* 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. *The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0.35 percent, a service charge of 0.75 percent over a 40 year period of maturity which includes a 10-year grace period. ### For more information on the World Bank’s work in sub-Saharan Africa visit www.worldbank.org/afr For more information on the World Bank’s work in Madagascar visit www.worldbank.org/madagascar For more information about this project visit http://web.worldbank.org/external/default/main?pagePK=64027221&piPK=64027220&theSitePK=356352&menuPK=356386&Projectid=P088729