The package includes a $27.2 million concessional loan from the African Development Fund and a $40.8 million concessional loan from the Transition Support Facility. The approval brings total funding for the two-phase programme to $136 million.

The AfDB said the programme builds on results achieved under the first phase, which included the rollout of a modern tax administration system and the adoption of a national anti-corruption strategy extending to 2030.

The second phase is expected to focus on strengthening public financial management and improving private sector competitiveness. The reforms aim to expand fiscal capacity and support investment.

Adam Amoumoun, AfDB Country Manager for Madagascar, said the programme reflects progress made in implementing reforms despite challenging conditions. Amoumoun said the initiative is aimed at supporting a more resilient and transparent economic system.

The programme also includes measures in the energy sector. These include the establishment of an independent electricity regulator and a National Fund for Sustainable Energy. The fund is expected to support off-grid and rural electrification, particularly in areas where a large share of the population has limited access to electricity.

A revised public-private partnership law is also part of the programme. The legal framework is intended to support investment in infrastructure and clean energy projects by providing greater certainty to investors.

Tax revenue is projected to increase from about 10.5% to 12% of gross domestic product by the end of 2026.

The programme follows the formation of a new government in Madagascar in March 2026, which has reaffirmed its commitment to economic reforms. The AfDB said the financing will support broader efforts by development partners to strengthen economic stability and resilience.

–AfDB/ChannelAfrica–