http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.25Change: 0.08
R/$ = 10.57Change: 0.04
Au 1312.89 $/ozChange: 0.26
Pt 1486.50 $/ozChange: -2.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jul 06, 2012

Malawi adjusts power pricing thinking in bid to attract private developers

Back
CoAL|Energy|Escom|Hydropower|PROJECT|Resources|Supply Corporation|US’s Millennium Challenge Corporation|China|Malawi|Mozambique|USD|Electricity|Electricity Sector|Electricity Tariffs|Energy|Power Generation|Power Producers|Power-generation|Shire River|Ben Botolo|Bingu|Joyce Banda|Ken Lipenga|Power
coal|energy-company|escom-company|hydropower|project|resources|supply-corporation|uss-millennium-challenge-corporation|china|malawi|mozambique|usd|electricity|electricity-sector|electricity-tariffs|energy|power-generation|power-producers|power-generation-industry-term|shire-river|ben-botolo|bingu|joyce-banda|ken-lipenga|power
More Insight
© Reuse this



The Malawi government says it has put in place measures to attract independent power producers in its electricity sector, which is dominated by the State-owned Elec-tricity Supply Corporation of Malawi (Escom).

Finance Minister Ken Lipenga said when he presented the country’s 2012 Budget to Parliament last month that the measures included gradually removing subsidies on electricity supplied by Escom to ensure the tariffs were at full cost-recovery levels.

“There has been limited private-sector investment in the power sector in Malawi because electricity tariffs have been set too low. The adjustment of electricity tariffs to full cost-recovery levels will create incentives for private-sector investment in power generation and distribution.”

Lipenga added: “Because energy is the lifeblood of industry, immediate reforms are needed to create a conducive environment for scaling up capacity. In pursuit of this goal, we have increased electricity tariffs by 63.52% so that revenues in the sector are closer to cover- ing the costs of production. This measure is a move towards a more market-determined tariff structure in the electricity sector.

“It is our intention to have a pricing structure that reflects the long-run average cost of producing electricity in order to allow the private sector to invest in further generation capacity.”

Lipenga said the upward adjustment of the country’s electricity tariffs would also assist Escom in raising funds to meet the cost of importing electricity from Mozambique under the planned World Bank-financed Mozam-bique–Malawi power interconnector project.

Malawi, which generates 98% of its electricity from hydropower plants on the Shire river, has an installed generation capacity of less than 300 MW, while demand is around 400 MW and is projected to increase to 700 MW by 2020.

Meanwhile, the Malawi government says it is optimistic about its negotiations with the US’s Millennium Challenge Corporation (MCC), from which it is seeking $350-million for the power sector. The deal was suspended over concerns about poor governance and lack of respect for the rule of law during the previous administration of the late President Bingu wa Mutharika.

Lipenga said, thanks to positive reforms initiated by the administration of the country’s new President, Joyce Banda, MCC had reopened its country office in Malawi and there were high hopes that the US federal agency would resuscitate the grant.

Proceeds from the MCC grant would be used mainly to rehabilitate Malawi’s power plants, which frequently break down, contributing enormously to the country’s electricity woes.

In a related development, the Malawi government says its Kapichira 2 hydroelectric power station will come on stream in August 2013.

The station will add 64 MW to Malawi’s power grid.

Ministry of Energy and Mines principal secretary Ben Botolo says: “We expect to have the machines at the site between August and December this year. The contractor has already worked on the designs and the specifications have been taken to China.”

In other efforts to increase power production capacity, Malawi is implementing the $70-million World Bank-financed Malawi Energy Sector Support Project, which involves a number of surveys to identify and develop potential for electricity generation on a number of rivers in the country, and is also pursuing a project to quantify its coal resources for electricity generation.

Edited by: Martin Zhuwakinyu
© Reuse this Comment Guidelines
 
 
 
 
 
 
 
 
Other News This Week News
Local aerospace company Denel Aerostructures (DAe), part of the State-owned Denel Group, has won a fourth contract to manufacture parts for the Airbus A400M military air transport and air-to-air refuelling aircraft. The new contract, which was won in an international...
An increasing number of buyers, in both the new and used car markets, are opting for finance structures that lower their monthly repayments, says asset financing company WesBank. These include the use of large balloon payments (also known as residuals), as well as...
More
 
 
Latest News
Updated 44 minutes ago Engineering and construction group Wilson Bayly Holmes-Ovcon (WBHO) has launched a sponsored American Depository Receipt (ADR) programme in the hopes of opening up investment in the group to international investors, particularly US investors. The ADR programme was...
Updated 53 minutes ago Telecommunications giant MTN has, for the second year running, been named the country’s most valuable brand, accounting for 16.5% of the total value of the country’s top 50 brands and potentially emerging as Africa’s first home-grown “superbrand”, Brand...
Updated 2 hours 45 minutes ago In an update to shareholders, financially distressed civil engineering group Protech Khuthele Holdings, this week, said it was still awaiting the appointment of a liquidator. This followed after business rescue practitioner Gavin Gainsford, earlier this month,...
More
 
 
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
 
 
 
 
 
This Week's Magazine
Local aerospace company Denel Aerostructures (DAe), part of the State-owned Denel Group, has won a fourth contract to manufacture parts for the Airbus A400M military air transport and air-to-air refuelling aircraft. The new contract, which was won in an international...
Bob Skinstad
Although CEO Mark McChlery and chief marketing officer Bob Skinstad likened themselves to children in a playground when taking on the task of “reengineering and repositioning” the Seartec brand, the “young, dynamic and enthusiastic guys” were like proud...
An increasing number of buyers, in both the new and used car markets, are opting for finance structures that lower their monthly repayments, says asset financing company WesBank. These include the use of large balloon payments (also known as residuals), as well as...
Tertiary education institutions can use search engine giant Google’s Chromebook to provide secure mobile end-point devices for students on which they can share documents, work collaboratively on documents and access education materials and applications being used...
Local ceiling and partition company Abbeycon has beaten global competition at the Saint-Gobain Gypsum International Trophy competition, which was held last month in Berlin, Germany.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks