The African Development Bank (AfDB) has pledged $75 million (about K55 billion) to cater for priority projects in the first phase of the Songwe River Basin Development Programme (Srbdp) jointly being implemented by Malawi and Tanzania.
In his brief during a donor’s conference in Lilongwe on Thursday, AfDB resident representative Andrew Mwaba said the bank will tap the funds from the regional window of the African Development Fund (ADF), which is used to finance inter-governmental projects.
He said: “For us, the Songwe River Basin is not just a project. It is a public good because it is for the region as a whole.
“So, we are going to provide maximum support. We shall also use our office to leverage financing from other partners.”
Mwaba said resources from the ADF are interest-free with a grace period of 10 years and a repayment period of 30 years.
Minister of Finance, Economic Planning and Development Goodall Gondwe, who presided over the conference, said the Government of Malawi will be financing the programme on a year-to-year basis.
He said: “It will very much depend on how we start the programme. If we see that it is really succeeding, we will invest considerable amount of resources depending on how successful it becomes.”
On his part, Tanzania’s Minister of Water and Irrigation Gerson Hosea Lwenge said both countries will share equally to develop the programme.
He added that flooding in the basin remains a challenge for both countries; hence, the need to work towards the common goal.
The two governments have since signed a memorandum of understanding (MoU) to go into Phase III of the programme which has been on-going since 2001.
Part of the projects under the programme include a $550 million (K403.7 billion) hydro-electric power plant with a capacity to produce 180.2 megawatts of electricity and a potential 6 200 hectares of irrigable land from the basin.