Project Runway – Madagascar airports in major revamp
Madagascar airports are all set for upgrade and expansion with the help of the Emerging Africa Infrastructure Fund (EAIF). The €215 million project is expected to generate employment and developmental changes across the continent...
Madagascar, the world’s fourth largest island, is renovating its two international airports at the cost of €215 million ($245 million) with the help of the Emerging Africa Infrastructure Fund (EAIF).
The construction work has already commenced to upgrade the runways, passenger terminal facilities and allied infrastructure of the Ivato international airport in Antananarivo and the Fascene international airport in Nosy Be.
“Any international airports are the symbol of the connection to the world,” said Hery Rajaonarimampianina, President of the Malagasy Republic when he visited the project site. “The work would reflect the modern and dynamic and friendly image of Madagascar,” he added.
Funding issue resolved
Sub-Saharan countries in Africa have always found it difficult to find investment funding for their infrastructure projects, especially from the private sector. But this time around, it is different. After two years of struggle, the private sector operator Ravinala Airports consortium now has the necessary funds to complete the construction of the two airports. EAIF has provided a €25m long-term loan over a 16-year term.
“The Madagascar airports projects represent a step change for the country’s economic development drive,” comments EAIF Chairman David White. “Efficient and modern airports are one of the foundation elements of progress. They are significant employers in their own right and catalysts for growth in almost every sector of an economy. In Ravinala Airports we have a highly skilled, globally experienced and strongly motivated private sector airport operator. This is very good news for Madagascar,” he added.
The big names supporting the project
Investec Asset Management (IAM), one of the largest third-party investors in private equity, credit, public equity and sovereign debt across the African continent manages EAIF. EAIF is also member of the Private Infrastructure Development Group (PIDG), which currently receives support from seven governments – including the UK, the Netherlands, Sweden and Switzerland – as well as private sector banks including the German development finance institution, KfW, and its Dutch equivalent, FMO.
Additionally, a consortium of four international development banks have come together to support the development projects, including the World Bank's International Finance Corporation (IFC), Proparco Economic Cooperation (PPP), the Development Bank of Southern Africa (DBSA) and the OPEC Fund for International Development (OFID). Additionally, the projects are sponsored by the French companies Groupe Aéroports de Paris (ADP), Bouygues Bâtiment International and Colas Madagascar and Meridiam. Groupe ADP will provide support in the operation and maintenance of both airports throughout the term of the concession. Furthermore, ADP Ingénierie has been working on the design of the new Ivato Airport terminal.
Having vast experience in the design and construction, Bouygues Bâtiment International is putting its expertise into use for building new airport terminals. Based in Madagascar for the past 60 years, Colas Madagascar will contribute to the airfield roadways. Both the companies have entered into a 50/50 “Design Construction” joint venture.
Since December 2016, Ravinala has been in charge of the operation of the airports as part of its economic reforms programme, signed for a period of 28 years with the Malagasy government. The island nation’s airport infrastructure was built five decades ago.
Rajaonarimampianina also believes that the launch of the project is a sign of consolidation of the confidence between the Malagasy government and foreign investors.
What will be new?
The funding issue has already been resolved and the engineers and technicians have already begun their work at Ivato airport in Antananarivo. While Ravinala Airports looks to complete the construction in December 2018, the Ivato airport is expected to go into commercial service in June 2020.
The passenger handling capacities will more than double to an annual capacity of 1.5 million passengers, which could be further extended to 1.8 million. The Ivato airport will host a new 17,500 square meter international terminal, while its existing terminal will be renovated to deal with domestic traffic. The runway would be strengthened and resurfaced, so that it could accommodate wide-bodied aircraft for the first time.
Meanwhile, Fascene airport in Nosy Be, one of the country’s most used tourism airports, has its own improvements in store for its terminal and runway. The airport’s capacity will be able to accommodate 500,000 passengers a year. After the renovations, Ravinala is hoping to promote the airport to airlines and tourism operators worldwide.
In 2016, these two airports welcomed 845,000 and 147,000 passengers respectively, two thirds of which consisted of international passengers. Their expected average annual passenger numbers would rise by at least five percent over the coming years.
Madagascar has a population of 24 million people, 75 percent of whom live below the poverty line, making it one of the very poorest countries in the world. The project is expected to bring employment for locally engaged people in construction, retail and beyond. It is also expected to contribute $71.5 million (€61 million) in taxes to the Madagascan government.
Nazmeera Moola is Head of EAIF at Investec Asset Management and comments: “This is the first airport infrastructure project EAIF has supported and one of the most significant in terms of macro and micro economic development. Madagascar’s ability to compete globally, particularly in tourism and trade markets, will be boosted, as will its internal trade potential.”
So, Africa is witnessing another period of growth thanks to disruptive investors believing in the country’s potential within the infrastructure sector.
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.