EIB gives Madagascar 300 mln euro loan for roads, power

May 20, 2015 1:36 PM

ANTANANARIVO (Reuters) - The European Investment Bank (EIB) has given Madagascar a 300 million euro ($333 million) loan to go be used to rehabilitate roads, power and energy infrastructure, the island state said.

Men push charcoal for sale on a handcart along the streets of Madagascar's capital Antananarivo, December 22, 2013. REUTERS/Thomas Mukoya

The president's office in Madagascar said in a statement late on Tuesday that the EIB loan would also help in emergency repair work resulting from cyclone damage.

President Hery Rajaonarimampianina took office in January 2014 after successful elections in 2013 ended a political crisis after a coup in 2009 that prompted international donors to cut ties. Following the vote, donors, including the International Monetary Fund and World Bank resumed lending to Madagascar.

The Indian Ocean island state, famed for its wildlife and eyed by foreign companies for its minerals, has however struggled to lure back tourists and investments into other sectors of a fragile economy.

Madagascar's economy showed early signs of recovery in 2014 with growth estimated at 3 percent, which could rise to 5 percent in 2015, but political instability, weak institutions and weak governance are hurting prospects, the IMF has said.

($1 = 0.9008 euros)