(Ecofin Agency) - The International Monetary Fund (IMF) announced on June 21 that its Executive Board approved two aid programs worth a combined $658 million for Madagascar. The funding aims to strengthen the economic resilience of the island nation and support its climate change adaptation efforts.

The first program, under the Extended Credit Facility (ECF), amounts to $337 million. Scheduled to last 36 months, it will provide essential support by anchoring fiscal sustainability, enhancing governance, stabilizing monetary and financial systems, and advancing reforms to promote industrialization and human capital development.

The second program, under the Resilience and Sustainability Facility (RSF), is worth $321 million. It focuses on reducing climate vulnerabilities through improved climate and disaster resilience, better ecosystem protection, and fostering conditions for private sector green investments.

These approvals enable an immediate disbursement of a $48 million loan tranche under the ECF. The IMF emphasized that the reforms supported by both the ECF and RSF aim to boost agricultural productivity, increase access to electricity, strengthen road infrastructure, enhance human capital, and improve governance.

"The authorities are committed to stabilize debt below 60 percent of GDP and bring the primary deficit to around 3 percent of GDP during the program. They intend to undertake revenue measures and to reduce transfers to the energy sector, including by a progressive phasing-out of fuel subsidies," the IMF statement said.