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MALAWI GOVT READY TO SUSTAIN COMPACT INVESTMENT

Government is ready to ‘nurture and sustain’ the investments in the power sector under the $350.7 million Malawi Compact, a senior government official has said.

Principal Secretary (PS) in the Ministry of Natural Resources, Energy and Mining Patrick Matanda said this last Friday at the New Nkhoma Power Substation on the sidelines of a visit to the substation by the Millennium Challenge Account-Malawi (MCA-Malawi) Board of Trustees.

The substation is one of the Compact-funded modern infrastructures designed to increase the capacity and stability of Malawi’s national electricity grid, bolster the power efficiency and as well as prepare for future expansion of the national grid.

“Measures have been put in place to sustain these investments and we are glad that both Electricity Generation Company (Malawi) Limited and the Electricity Supply Corporation of Malawi (ESCOM) have put in place structures to help sustain these investments,” said Matanda.

Both ESCOM and EGENCO with support from the Compact, have developed sustainability plans which look into the operation, management and maintenance of the new infrastructure to ensure that the assets benefit Malawians for generations to come.

“As part of Compact agreement, ESCOM and EGENCO have developed sustainability plans which have outlined budgets for maintenance and management of the equipment and staff training. The Plans were approved by the boards of EGENCO, ESCOM and MCA-Malawi,” explained MCA-Malawi’s Chief Executive Officer, Dye Mawindo.

ESCOM and EGENCO have both attached key technical staff to all major works with to build internal capacities for operations and maintenance of the assets created under the Compact. This has been one of EGENCO’s and ESCOM’s strategy to translate the Sustainability Plans into action. Currently, both ESCOM and EGENCO are busy arranging warehouses to accommodate spare parts for the equipment supplied by the contractors working under the Malawi Compact.  

Under MCA-Malawi’s Infrastructure Development Project (IDP), the 400/132 Kilovolt high voltage overhead transmission lines and substations have been constructed.

This means that Malawi’s power sector will now be able to transmit power at high voltage from the South to Central Region .The newly constructed 400KV substations at Phombeya and Nkhoma provide the critical facilities Malawi needed most to interconnect electricity with neighboring countries and join the Southern African Power Pool (SAPP).

According to Principal Secretary Matanda, Malawi is now ready to invest in an interconnector with Mozambique using the just completed Phombeya 400/132 KV Substation.

“In the same way, Malawi will soon be interconnecting with Zambia using the newly constructed Nkhoma Substation. The new 132KV Substation at Bwengu, Mzimba, has been constructed with designs to expand the substation in future to have 400KV facilities to connect high voltage line from Nkhoma in Lilongwe to Bwengu. The substation will act as a take-off and landing point of electricity once connected with Tanzania under the SAPP arrangement,” Matanda explained.

Once commissioned and energized, both the lines and the substations would transmit reliable and high voltage power before distribution to industries and households.

“With such infrastructure in the power sector, we will now have the capacity to buy and in future sell power to and from other countries, through the Southern Africa Power Pool,” Matanda added.

Malawi will for the first time, be connected to the Southern Africa Power Pool (SAPP) through the New Nkhoma, Phombeya and Bwengu Substations in the central, south and northern region, respectively.

According to PS Matanda, the recent implementation of reforms in the power sector, courtesy of the Malawi Compact, Independent Power Producers (IPPs) are now showing interest to invest in power generation and will compete with EGENCO on the market before selling it to the Single Buyer, a newly-established independent Company.

The newly established company mandated to perform the services of a Single Buyer in the restructured electricity market, will be responsible for purchasing power from the IPPs including EGENCO and sell it to ESCOM for transmission and distribution to customers.

Another key section established in the new power market is the System Market Operator responsible for operating and administering the power market to ensure that the consumer demand for power is met. The SMO, currently operating under ESCOM, manages the dispatch of generated power and the maintenance of the electricity network in the country.

Recently, United States Ambassador to Malawi, Virginia Palmer, stated that the sustainability of MCC investments will require the continued commitment of the Government of Malawi and project partners to achieve power sector reform goals, including an electricity tariff and policy environment that allows the power institutions to cover the cost of producing electricity, expand and maintain the electricity grid, and encourages private sector investment in power generation.

The Compact, which ends on September 20, 2018, aims to reduce poverty by modernizing Malawi’s power sector and improving the availability, reliability, and quality of the power supply.

 

Government is ready to ‘nurture and sustain’