Madagascar: EIB €20 Million Loan for Sahanala Initiative to Boost Food Security

An EIB loan of €20 million to Sahanala, a social enterprise working in agriculture and fishing in Madagascar, aims to increase sustainable food production for the domestic market and 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.
The Antananarivo signing of a €40 million Sahanala project, supported by a €20 million investment from the European Investment Bank (EIB), will benefit smallholder farmers, fishermen, and the entire Malagasy population.

The loan will fund two initiatives:

The first initiative (Maitirano) will promote agricultural mechanisation alongside traditional cultivation methods in western Madagascar. It will also include the construction of an industrial complex to process corn, rice, oils and animal fodder for the domestic market. This will assist in increasing revenues and enhancing the living conditions of producers.
The second project entails building a modern collection centre with refrigeration equipment in northern Madagascar (Vohémar). It seeks to encourage responsible fishing and will allow small-scale fishermen to sell their products on domestic and international markets. Additionally, ice machines will be deployed in several collection centres.
Through these projects, Sahanala seeks to promote economic growth and improve the daily lives of its principal shareholders — the farmers and fishermen, as well as the communities and families that depend on them — notably by creating over 1,500 jobs. They will provide farmers and fishermen with technical and financial knowledge, granting them greater access to markets at reasonable prices and enhancing their capacity to meet the rising demand for nutritious staple foods among the Malagasy populace. Simultaneously, Sahanala will train producers to adhere to high environmental standards and to protect biodiversity and natural resources to ensure long-term sustainable development. Sahanala is anticipated to become the first Malagasy enterprise to export certified Marine Stewardship Council (MSC) seafood products. Additionally, the company is committed to promoting equal opportunities in the agriculture industry by encouraging women to assume management roles and providing them with training, financial services, and information.
During an official visit to Madagascar, EIB Vice-President Ambrosio Fayolle signed the agreement and stated, “This project will contribute significantly to Madagascar’s food security and improved livelihoods through sustainable agriculture and fishing.” As the EU climate bank, the EIB is delighted to support Sahanala’s efforts to ensure sustainable practises, improve biodiversity, and strengthen climate change resilience, which are key objectives of the Global Gateway strategy of the European Union.

Serge Rajaobelina, chief executive officer of Sahanala, stated: “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 expertise, and by encouraging them to do their part for local development and the environment. Farmers own Sahanala; they determine the company’s business strategy. Each initiative, like these two, is the result of the community’s work and enables us to invest in emerging industries. Our mission is crystal clear: to promote local economic development through a fair and responsible approach.”

The Minister of Agriculture and Livestock of Madagascar, Harifidy Ramilison, presided over the signing ceremony and stated: “The public sector needs support for these types of projects, as rural development and food self-sufficiency (a commitment made by the President of Madagascar in Velirano No 9) are government priorities. We are pleased to continue contributing to Madagascar’s development.”

Ambassador of the European Union to Madagascar Isabelle Delattre Burger is ecstatic about the signature of this loan. She anticipates that this will be the first of many joint EIB-Team Europe initiatives to buttress the private agrifood sector, especially where such initiatives target the agricultural sector.

About 80% of Madagascar’s engaged population is employed by the agricultural and agricultural processing industries. In recent years, the sector has been impacted by drought and livestock disease, in addition to the severe effects of the COVID-19 crisis and the Ukraine conflict on Madagascar’s overall economy. This resulted in a catastrophe in the south of the country in 2021-2022, which affected hundreds of thousands of subsistence farmers.