Share the page

Supporting the sustainable growth path of Madagascar

Project

Financial services
Signature date
Location
Madagascar
Financing tool
Loan
Financing amount (Euro)
9217000
Financing details
USD 10m loan
Customer
Société Générale Madagasikara
Type of customer
Financial institution
Country of headquarters
Madagascar
Project number
PMG1073
Environmental and social ranking
IF-A
Climate co-benefits
Project with climate co-benefits
Download the report

This information is given at the time of signature, without prejudice to any developments in the operation/project.

Proparco is collaborating with Société Générale Madagasikara by contributing to the green, social and sustainable bond issued by the bank. The objective is to support employment and climate projects in the country.

Client presentation

Société Générale Madagasikara (SGM) is a leading player in the banking sector in Madagascar, with a market share for deposits and loans experiencing growth between 2019 and 2023. In 2023, the bank showed significant profitability and its capital adequacy ratio (CAR) stood at 11.2%, exceeding regulatory requirements. SGM is recognized by all the local players for its robust processes and the professionalism of its management. It is a longstanding partner of Proparco. As the bank is part of the SG Group, it has been able to develop real expertise in sustainable finance.

Project description

The transaction is in line with Proparco’s mandate and consists in a subscription to a USD 35m green, social and sustainable bond issued by Société Générale Madagasikara (SGM). Proparco will contribute USD 10m, the same amount as IFC and FMO (USD 10m each), with between USD 7m and USD 8m subscribed by local investors. The bank will allocate the entire USD 37m-USD 38m raised by the issue to finance impact projects. 

More specifically, 40% of Proparco’s funds will be allocated to renewable energy projects, which will help Madagascar achieve 80% of renewable energies by 2030. The project will also support small businesses and microenterprises (30% of Proparco’s funds) and microfinance institutions (MFIs) (30% of Proparco’s funds), in line with the Choose Africa initiative which aims to reduce inequalities.

Project impact

The expected impacts of this first bond issue in Madagascar are as follows: 

  • 4,875 direct and indirect jobs supported at Société Générale Madagasikara and in the companies (SMEs, corporates) that will benefit from Proparco’s financing 
  • Support for 180 SMEs (30% of the funds) and access to 338 microcredits through the MFIs financed by the bank (30% of the funds)
  • The project qualifies as “climate-mitigation” as 40% of the funds will be earmarked for renewable energy projects  

The project will contribute to SDG 1 “No poverty”, SDG 8 “Decent work and economic growth”, SDG 10 “Reduced inequalities” and SDG 13 “Climate action”.