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USA SAYS REFORMS KEY TO INCREASED POWER SUPPLY

United States of America (USA) Ambassador to Malawi Virginia Palmer says with exactly 57 days remaining before the compact ends, there are several outstanding elements of the power sector reform that remain to be completed by the Government of Malawi.

Speaking through a press statement issued recently by Millennium Challenge Account-Malawi (MCA-Malawi), Palmer observed that much as the $350.7 million Malawi Compact has laid modern power infrastructure across the country, it was also important for government to ensure that that electricity tariffs reflect the cost of supplying such electricity as part of broader reforms in the power sector under the Malawi Compact.

The Malawi Compact, which commenced project implementation on September 20, 2013, closes on September 20, 2018.

“Investors won’t build power plants here if it’s not. I urge the Government of Malawi and ESCOM to ensure that the reforms are fully implemented so that Malawi can bring in new private sector investors,” said Palmer.

Palmer said to fully realize the benefits of the Compact investments, the government needs to ensure power sector reforms, including achievement of a tariff rate that reflects the cost of creating and delivering electricity.

Palmer said the Compact’s investments make possible the purchase of additional power from Mozambique and Zambia and, even more importantly, from new power generation investments in Malawi.

Palmer said by making tariffs cost-reflective, it would help make ESCOM financially sound enough to purchase the additional power.

On his part, MCA – Malawi Chief Executive Officer Dye Mawindo said his institution is working with all its contractors to ensure that all the projects are finished on time.

Mawindo said as an implementing entity, MCA-Malawi is working closely with its project partners, namely, Electricity Supply Corporation of Malawi (ESCOM), Electricity Generation Company (EGENCO) and the Ministry of Natural Resources, Energy and Mining to complete Compact activities within the stipulated timeframe.

“We want to minimize any outstanding works beyond September, 2018 to reduce the financial obligations of ESCOM, EGENCO, or the Government,” said Mawindo.

Mawindo added that as MCA-Malawi moves towards finishing infrastructure works, there is need for commitment from all parties to completely implement power sector reforms.

“It is those reforms, coupled with new transmission lines and refurbishment works on power infrastructure, that will position Malawi well to continue building on progress after the Compact end,” added Mawindo.

Meanwhile, the refurbishment of Nkula A under the Malawi Compact has already added 12 Megawatts to the national grid on trial basis.

The construction of new substations and approximately 400 kilometers of transmission and distribution lines will allow for efficient transmission and distribution of power throughout the grid.

These infrastructure improvements will also make possible Malawi’s future connection to the Southern African Power Pool so Malawi can buy, and someday sell, power in the region.

 

Ambassador Palmer speaking during one of the closeout events organised by MCA Malawi