The World Bank

Connecting Madagascar for Inclusive Growth Program (P173711)

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Project Information Document (PID)

Concept Stage | Date Prepared/Updated: 02-Feb-2021 | Report No: PIDC29124

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 The World Bank
Connecting Madagascar for Inclusive Growth Program (P173711)

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 The World Bank
Connecting Madagascar for Inclusive Growth Program (P173711)

BASIC INFORMATION

A. Basic Project Data OPS TABLE

Country Project ID Parent Project ID (if any) Project Name

Madagascar P173711 Connecting Madagascar
for Inclusive Growth
Program (P173711)
Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead)
AFRICA EAST Nov 01, 2021 Dec 16, 2021 Transport

Financing Instrument Borrower(s) Implementing Agency

Investment Project Financing REPUBLIC OF MADAGASCAR Road Agency, Madarail

Proposed Development Objective(s)

The Project Development Objective is to enhance transport connectivity in select priority areas and strengthen the
sustainability of existing transport assets

PROJECT FINANCING DATA (US$, Millions)

SUMMARY-NewFin1

Total Project Cost 400.00

Total Financing 400.00
of which IBRD/IDA 400.00
Financing Gap 0.00

DETAILS -NewFinEnh1

World Bank Group Financing

«LEVEL»«FINCR_NAME»«LEVEL»«FINCR_NAME»«FINCR_NAME»«FINCR_NAME»«FINCR_
400.00
NAME»
«FINCR_NAME»«LEVEL»«FINCR_NAME»«FINCR_NAME»«FINCR_NAME» 400.00

Environmental and Social Risk Classification Concept Review Decision

Substantial Track II-The review did authorize the preparation to
continue

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Connecting Madagascar for Inclusive Growth Program (P173711)

Other Decision (as needed)

B. Introduction and Context

Country Context

1. In recent years, Madagascar has been experiencing constant growth thanks to the overall political stability and
careful macroeconomic management. Madagascar is the fourth largest island in the world, with a total population of
over 26 million. The country has various economic potentials, such as tourism, agrobusiness, fishery, light manufacturing
and mining. After the political and economic crisis in 2009, the Malagasy economy has been recovering steadily, with an
average growth rate of over 4 percent in the last 5 years, led by strong investment in the infrastructure, textile and
apparel, agrobusiness and mining industries. Macroeconomic outlook recently appears uncertain, at least in the short
term, given the current COVID19 pandemic and possible global economic recession.

2. Despite the recent growth, poverty is persistently high especially in rural areas of Madagascar. The country’s
GDP per capita is US$527, among the lowest in the world and about 75 percent of the total population still lives below
the poverty line. With 2/3 of the population living in rural areas, Madagascar remains a primary rural country. Rural and
remote areas are particularly lagging, and the rural population is primarily engaged in subsistence agriculture and is
disconnected from the country’s economic growth. For example, there is a strong correlation in Madagascar between
poverty incidence and road connectivity as measured by the Rural Access Index (Fig 1).

3. Madagascar is highly vulnerable to shocks, particularly extreme climatic events but now also COVID-19,
therefore requiring a more resilient infrastructure. The country is one of the Vulnerable Twenty (V20) Group countries
and has experienced significant climate events almost annually, such as tropical cyclones, floods, storm surge and
landslides. Transport services, such as domestic and international airlines as well as public transport, are critical to
maintain national and international connectivity for a large island country such as Madagascar and have been heavily
affected by the COVID-19 lockdown. This requires mobilizing additional resources to build more climate resilient
infrastructure and to assist transport operators financially sustain the COVID-19 pandemic.

4. The development of the transport sector is therefore critical for the overall development of Madagascar’s
economy and services, and to ensure local and international connectivity to markets. Yet it is also costly due to
Madagascar’s geography (very large island), difficult topography (central mountains and dense coastal forests), climate
& other shocks, and the generally scattered population with low concentration of volumes (both goods and passengers)
outside the Capital. This results in transport unit costs being high, and the attractiveness of transport sector to private
investments – outside few key transport modes – generally low. It is therefore necessary to mobilize large resources to
“jump-start” the economy and break the isolation of markets and the pockets, which will then trigger more economic
activity and investments, followed by increased financial and fiscal revenues.

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 The World Bank
Connecting Madagascar for Inclusive Growth Program (P173711)

Sectoral and Institutional Context

5. Madagascar has basic transport infrastructure assets, but most of them are currently nonoperational or in need
of rehabilitation or expansion. The country has almost all transport modes, including a road network of about 32,000km,
a rail network of 845 km of metric gauge (of which about 670 km are moderately operational under the concession
contract with Madarail), 17 seaports, including the country’s primary port at Toamasina (which handles 80 percent of
the country’s total cargo), 400 km of navigable waterways (Canal des Pangalanes), and 12 primary airports and 44
secondary airports in the country. Unfortunately, many of them are currently nonoperational or in need of repair or
expansion because of lack of proper maintenance and investment. Significant efforts are required to restore
functionality of these infrastructure assets. The current transport infrastructure and transport modes are poorly
integrated, hampering efficient movement of goods and people. To connect producers and consumers to markets
efficiently, different types of transport infrastructure and modes need to be integrated seamlessly.

6. The transport sector’s development in Madagascar, critical for its growth and prosperity, faces three main
strategic challenges in term of i) poor governance & coordination; ii) lack of adequate financing; and iii) and long term
integrated vision for the sector. Two ministries and over a dozen public agencies and private concessionaires are
involved in the management of the transport sector, requiring additional coordination efforts and clear delineation of
responsibilities. The sector is characterized by the devolution of several of the execution functions to other government
agencies and private concessionaires. While the large needs within a large territory justify a move for more agile and
specialized agencies, this has to be implemented : i) in a well-coordinated manner among the various agencies involved,
ii) with the delineation of clear roles and responsibilities; and iii) in an incremental yet sustained manner to gradually
increase the responsibilities of specialized agencies while matching their capacity and resources.

7. In order to address the above-mentioned strategic challenges in the sector, the Government of Madagascar is
requesting a large, programmatic, and long-term support from the World Bank. The program will support the
government’s efforts to develop a long-term intermodal strategic vision for the sector. It will address, in a systematic
manner, infrastructure, financing, and institutional challenges. This program will also signal an important and sustained
commitment by the World Bank and the government on an overall long term direction of reforms and development of
the sector, relatively decoupled from political changes, and will act as a platform to leverage additional financing from
government, donors and the private sector (including IFC).

Relationship to CPF

8. The Multi-Phase Programmatic Approach (MPA) is fully aligned with the World Bank’s CPF for FY17–21 which
aims to build on the current relative political stability to help address structural fragilities that hamper the sustainable
development in Madagascar. The program supports the two focus areas of the CPF which are: (a) promoting inclusive
growth and (b) increased resilience and reduce fragility.

C. Proposed Development Objective

9. The MPA has three phases and the development objective for the overall program is to improve transport
connectivity and enhance its long-term sustainability to enable inclusive growth and poverty reduction.

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Connecting Madagascar for Inclusive Growth Program (P173711)

The project development objective for the first phase, the Project, is to enhance transport connectivity in select priority
areas and strengthen the sustainability of existing transport assets.

Key Results (From PCN)

10. key results include:

a) Percentage change in transport costs along select corridors;

b) Percentage change in travel time along select corridors;
c) Percentage of population with access to all weather road;
d) Share of transport infrastructure upgraded to climate resilient standards;
e) Percentage change in annual transport related fatalities;
f) Number of direct jobs created, including for women;
g) Number of project beneficiaries, including women.

D. Concept Description

11. The MPA will be prepared in three overlapping phases to be all executed over a period of 10 years. The MPA will
contribute to the national transport vision and multimodal investment plan and will act as an important platform to
leverage additional and important financing from donors, government, and the private sector. The MPA will support
investments and reforms in all transport modes – road, rail, civil aviation, and ports

12. The first phase of the MPA, the Project, will finance the rehabilitation of national and associated feeder roads
and will pilot new maintenance techniques such as performance-based contracts and microenterprises. It will also
finance the rehabilitation of railway infrastructure and associated reforms.

Legal Operational Policies Triggered?

Projects on International Waterways OP 7.50 No
Projects in Disputed Areas OP 7.60 No

Summary of Screening of Environmental and Social Risks and Impacts

.

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 The World Bank
Connecting Madagascar for Inclusive Growth Program (P173711)

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CONTACT POINT

World Bank
Ziad Salim EL Nakat
Senior Transport Specialist

Borrower/Client/Recipient
REPUBLIC OF MADAGASCAR

Implementing Agencies
Road Agency
Christophe RAKOTOMAVO
Director General
cnrakotomavo@gmail.com

Madarail
Andrianjaka RAKOTONANAHARY
Deputy Director General
andrianjaka.rakotonanahary@madarail.mg

FOR MORE INFORMATION CONTACT

The World Bank
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 473-1000
Web: http://www.worldbank.org/projects

APPROVAL
Task Team Leader(s): Ziad Salim EL Nakat

Approved By
APPROVALTBL
Country Director: Idah Z. Pswarayi-Riddihough 19-Feb-2021

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Connecting Madagascar for Inclusive Growth Program (P173711)

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