PROJECTS
JIRAMA Power Sector Fiscal Management Tool, Madagascar
The problem
Madagascar’s power sector required subsidies equivalent to 1 percent of GDP to cover operating costs. Arrears in payables owed to suppliers amounted to about 5 percent of the GDP. Moving forward, investment in hydro-power generation is the best option to meet growing demand while bringing down the cost of power, but JIRAMA—the public utility—lacked funds for investment, relying on government to underwrite it. These factors meant that the sector posed a fiscal risk that could destabilize government finances and the economy, if not properly managed
How we helped
Castalia developed a tool to allow the Government to monitor JIRAMA and quantify future fiscal costs. The tool helps the Government anticipate, program, and make informed decisions on the utility’s liabilities by: identifying the annual subsidy needed to close JIRAMA’s operating deficit (and how tariff decisions impact the deficit), forecasting liabilities; and calculating contingent liabilities from Government support to hydro investments.
Impact
The Ministry of Finance is using the tool we created to manage the fiscal risk from JIRAMA and work out a way to minimize the fiscal burden.
How can we help you?
How can we help you?
WASHINGTON, DC
+1 (202) 466-6790
1747 Pennsylvania Avenue NW, Suite 1200
United States of America
SYDNEY
+61 (2) 9231 6862
Suite 19.01, Level 19, 227 Elizabeth Street
Australia
AUCKLAND
+64 (4) 913 2800
Sinclair House, 3 Glenside Crescent
New Zealand
WELLINGTON
+64 (4) 913 2800
Level 2, 88 The Terrace
New Zealand
PARIS
+33 (0)1 85 64 10 22
3B Rue Taylor
France
BOGOTÁ
+57 (1) 508 5794
Calle 81 #11-08, Piso 5, Oficina 5-121
Colombia
Thinking for a better world.
WASHINGTON, DC
+1 (202) 466-6790
1747 Pennsylvania Avenue NW, Suite 1200
United States of America
SYDNEY
+61 (2) 9231 6862
Suite 19.01, Level 19, 227 Elizabeth Street
Australia
AUCKLAND
+64 (4) 913 2800
74D France Street, Newton South
New Zealand
WELLINGTON
+64 (4) 913 2800
Level 2, 88 The Terrace
New Zealand
PARIS
+33 (1) 73 44 26 97
6 Rue Duret
France
BOGOTÁ
+57 (1) 508 5794
Calle 81 #11-08, Piso 5, Oficina 5-127
Colombia
Thinking for a better world.