Madagascar: Boost for farmers, fishers and food security with €20 million EIB loan for Sahanala initiative

• An EIB loan of €20 million for Sahanala, a social enterprise working in agriculture and fishing in Madagascar, aims to increase sustainable food production for the domestic market and for export.
• The initiative will reduce reliance on imports of maize and rice to meet local demand.
• The EIB deal — its first for the agriculture sector in Madagascar since 2005 — will support an overall investment of €40 million by Sahanala.

Smallholder farmers, fishers and the Malagasy population as a whole stand to benefit from a €40 million Sahanala project, supported by a €20 million investment from the European Investment Bank (EIB), signed today in Antananarivo.

The loan will support two projects:

• The first will promote agricultural mechanisation alongside traditional farming practices in western Madagascar (Maintirano). It will also cover the development of an industrial complex to process maize, rice, oils and animal feed for the domestic market. This will help raise revenues and improve the living conditions of producers.
• The second involves the construction of a modern collection centre with refrigeration equipment in northern Madagascar (Vohémar). It aims to promote responsible fishing and will enable small-scale fishers to sell their goods on the domestic and international markets. Ice machines will also be installed in various collection centres.

Through these projects, Sahanala aims to support economic development and improve the daily lives of its main shareholders — the farmers and fishers, and the communities and families that depend on them — notably through the creation of more than 1 500 jobs. They will provide farmers and fishers with technical and financial know-how, giving them better access to markets at fair prices, while increasing their capacity to respond to the growing demand for nutritious staple foods from the Malagasy population. At the same time, Sahanala will train producers to comply with high environmental standards and protect biodiversity and natural resources to ensure sustainable long-term development. Sahanala is expected to become the first Malagasy company exporting seafood products certified by the Marine Stewardship Council (MSC). The enterprise is also committed to strengthening equal opportunities in the agriculture sector, encouraging women to take on management responsibilities and providing them with access to training, financial services and information.

Signing the deal during an official visit to Madagascar, EIB Vice-President Ambroise Fayolle said: “This project will make a significant contribution to Madagascar’s food security and improved livelihoods from sustainable agriculture and fishing. As the EU climate bank, the EIB is pleased to support Sahanala’s efforts to ensure sustainable practices, improve biodiversity and strengthen resilience to climate change, which are key objectives of the European Union’s Global Gateway strategy.”

Serge Rajaobelina, chief executive officer of Sahanala, said: “In line with its raison d’être, Sahanala and its partners are empowering Malagasy farmers to improve their living conditions in a sustainable manner by enabling them to sell their products at a fair price, by respecting their know-how, and by encouraging them to do their bit for local development and for the environment. Sahanala is owned by farmers — they are the ones deciding the company’s strategy. Each project, like these two, stems from their work as a community and enables us to invest in emerging sectors. Our mission is clear: to promote economic development among local communities through a fair and responsible approach.”

Presiding over the signature ceremony, Madagascar’s Minister of Agriculture and Livestock Harifidy Ramilison said: “The public sector needs support for these kinds of projects, as rural development and food self-sufficiency (a commitment of the President of Madagascar Andry Rajoelina in Velirano No 9) are priorities for the government. We are proud to continue playing our part in Madagascar’s development.”

Isabelle Delattre Burger, ambassador of the European Union to Madagascar, is delighted with the signing of this loan. She hopes it will be the first of many joint EIB-Team Europe support initiatives to bolster the private agrifood sector, in particular where such initiatives focus on the agricultural sector.

Agriculture and the agricultural processing sector employs around 80% of the active population in Madagascar. The sector has been affected in recent years by drought and livestock disease, on top of the severe impact of the COVID-19 crisis and the war in Ukraine on Madagascar’s economy as a whole. This led to a famine in 2021-2022 that affected hundreds of thousands of people in the south of the country, many of whom rely on subsistence farming.

Background information

About the European Investment Bank

The European Investment Bank (EIB) is the biggest multilateral financial institution in the world and one of the largest providers of climate finance. Since 1970, the EIB has made long-term investments of €904 million in Madagascar for key infrastructure as well as for the private sector.

EIB Global is the EIB Group’s specialised arm devoted to increasing the impact of international partnerships and development finance, and a key partner in the Global Gateway. We aim to support €100 billion of investment by the end of 2027, around one-third of the overall target of this EU initiative. Within Team Europe, EIB Global fosters strong, focused partnerships alongside fellow development finance institutions and civil society. EIB Global brings the Group closer to local people, companies and institutions through our offices around the world.

The EIB is committed to supporting women’s economic empowerment through its projects worldwide and in 2019 was the first multilateral development bank to endorse the 2X Challenge criteria. The 2X Challenge is a multilateral initiative launched in June 2018 by the G7 with the ambitious objective of deploying and mobilising unprecedented amounts of capital to support projects that empower women as entrepreneurs, as business leaders, as employees and as consumers of products and services that enhance their economic participation.

About the Global Gateway

The Global Gateway is the European Union’s strategy to boost smart, clean and secure links in the digital, energy and transport sectors, and to strengthen health, education and research systems across the world. Through a Team Europe approach, the Global Gateway brings together the European Union, its Member States and their financial and development institutions to mobilise the private sector to leverage investments for a transformational impact. It aims to mobilise up to €300 billion in investments. The Global Gateway is fully aligned with the UN Agenda 2030 and the Sustainable Development Goals, as well as the Paris Agreement.