Malawi has signed an agreement with the World Bank to develop the planned 258 MW Mpatamanga hydropower plant, on the Shire river.
Department of Energy Affairs spokesperson Saidi Banda says that, under the agreement, the Malawi government and the World Bank’s private-sector support arm, the International Finance Corporation, will provide equity for the project and procure a private investor.
The procurement of the private investor is expected to be completed by year-end, paving the way for the construction of the $472-million project to start in 2020.
Banda explains that, besides the expected equity finance, the Malawi government has set aside $200-million from the World Bank’s International Development Association for the project.
Meanwhile, the Malawi government has lined up several power generation projects that it is pitching to independent power producers (IPPs). The projects include the 50 MW Chasomba and 50 MW Chizuma hydropower plants, on the Bua river, which will require a total investment of $451.4 million. “These two projects have already gone through the feasibility study stage and were proved to be viable,” says Banda.
Also being promoted is the 50 MW Chim’gonda project, on the Dwambazi river, and the 100 MW to 175 MW Lower Fufu project, on the South Rukuru river.
Smaller projects for which investors are sought include the 41 MW Mbongozi project, on the Bua river, which will comprise two generating plants of 16 MW and 25MW. Their estimated price tag is $198-million.
Banda is optimistic that Malawi will soon conclude agreements with investors willing to develop the planned projects, noting that the Malawi government has introduced many incentives to attract investors to the power generation sector, which is dominated by the State-owned Electricity Generation Company (Egenco). The utility generates 98% of Malawi’s electricity on the Shire river, which has been plagued by siltation and low water levels, affecting hydropower plant operations.
Malawi, which faces a power deficit, is developing the Malawi–Mozambique and Zambia–Malawi power interconnector projects to improve supplies. The former is expected to be completed by 2021, while the completion date of the latter is yet to be determined.
The country also plans to diversify its power sources by embracing alternative energy sources like solar, wind, biogas and coal.
Malawi has an installed generation capacity of 347 MW, about half the country’s peak demand of 700 MW. As a result, the Electricity Supply Corporation of Malawi frequently resorts to load-shedding.
To supplement domestic supplies, the country imports 3 MW from Mozambique and 20 MW from Zambia, while negotiations are under way with the government of Tanzania, from which Malawi hopes to import gas, which will be used as feedstock for a 100 MW gas-fired power plant to be operated by Egenco or an IPP.