Coming after the project's full coal mine exploitation licence was approved, the agreement includes key approvals for building and operating the project, as well as related infrastructure, and is aligned with the 30-year power purchase agreement signed with state-owned utility JIRAMA in November last year.

The key approvals include building the evacuation line for the transport of electricity to connection points and granting Imaloto the right of way and any land use authorisation for road constructions and related infrastructure from the plant to connection points.

The agreement also enables the power plant to satisfy JIRAMA's direct needs for resale to the public, while also providing for any future collaboration with the utility or other entities on additional evacuation lines to large electricity consumers

The project is on track to deliver electricity by 2021 and will initially have a capacity of 60MW and over 250km of transmission.

Bushveld noted that, according to PowerAfrica, Madagascar only has 504MW of installed generation capacity catering to 24 million people and no power grid. The project should grow this by almost 12%.

Imaloto will be located at the mine-mouth of Bushveld's coal deposit, which has a resource of about 136 million tonnes of coal.

Bushveld is currently carrying a full technical and financial feasibility study for the power plant and transmission line, which should be completed by the end of June, while the project's social environmental impact assessment (SEIA) should be finished by the end of 2018.

Bushveld's coal and energy subsidiary Lemur Holdings CEO Prince Nyati said the concession made way for construction of the Imaloto to begin after the SEIA was concluded and financing was closed.

"Once completed, this project will, for the first time in the history of Madagascar, interconnect the south region from west to east," he said.

Bushveld CEO Fortune Mojapelo said the company was committed to competing the milestone set out for Imaloto this year, which included progressing the bankable feasibility study, completing the SEIA and engaging with lenders.

"In addition, 2018 is an election year in Madagascar and we will be monitoring the political developments closely. Overall, I am pleased to see the significant progress made on the project and delighted with the ongoing positive cooperation with the Madagascan government," he said.