At a time power blackouts are crippling industrial production, Minister of Natural Resources, Energy and Mining Aggrey Masi has challenged commercial banks to consider financing local firms to implement sustainable energy projects.
The minister said on Tuesday in Lilongwe during the Regional Energy Regulatory Association (Rera) for Southern African Conference that the projects could provide quick-fix solutions to the insufficient energy supply that is expected to subdue economic growth this year.
The conference, which drew 200 delegates from 12 countries, was jointly organised by Malawi Energy Regulatory Authority (Mera) and the Bankers Association of Malawi (BAM), a grouping of local commercial banks.
The conference sought to find solutions to energy challenges facing Southern African Development Community (Sadc) countries, including discussing how best to ensure all member States are connected to the Southern African Power Pool (Sapp) through energy interconnection projects.
The conference has come at a time Electricity Supply Corporation of Malawi (Escom) is supplying less than 200 megawatts (MW) of power, resulting in minimum of six hours of load shedding daily.
Masi said time for over- reliance on financing from foreign financiers is long gone; hence, the need for local financing solutions to energy projects.
He said: “Most of our Independent Power Producers [IPPs] are from outside the country, the local IPPs have not been able to participate because they do not have the financial muscle. That is why we have the banks in the meeting to give confidence to local investors that they can be assisted financially and administratively.
“In the past, banks were not part of these meetings. We only had international financiers, but now that they are here they must do more to finance energy projects by partnering local investors.”
BAM first vice-president Kwanele Ngwenya, who is also chief executive officer of Malawi Stock Exchange (MSE)-listed NBS Bank plc, said there has been an attempt by different banks to finance energy projects, but the missing link has been inadequate awareness for investors to understand what banks do.
“As BAM, we have taken a strong approach on issues to do with energy in Malawi to ensure that we are part of the conversation. As a nerve centre of the economic development, banks are critical in the development of infrastructure of our country.
“During this meeting, we had blackouts twice and that for us is an opportunity. You know Escom is failing to provide sufficient power, so this gives an opportunity for private players to come on board and at least for the banks to finance the sustainable energy projects.”
On his part, Rera executive secretary Elijah Sichone said the grouping seeks to find solutions to energy options with less detrimental impact to the environment, ensure increased access and affordability.
“The endowment in terms of resources is different from one country to another and the whole idea is pulling all resources together,” he said.