The country’s financial sector is advocating for the liberalisation of the renewable energy sector to make it attractive for investment financing as a way of helping to improve access to clean energy.
Bankers Association of Malawi (BAM) chief executive officer Violette Santhe said this in on the sidelines of the renewable energy stakeholders meeting in Lilongwe last week.
She said the success of renewable energy projects depends on methods government adopts in implementing policies on renewable energy and the level of government’s capacity to attract financing.
Said Santhe: “The policy recommendations we have are actually derived from the barriers to private finance. Much as the financial sector is willing to finance the renewable energy sector, there is need for the stakeholders like government, development partners and other philanthropists to look at issues that hamper investment into this sector.
“There is need to provide incentives that can attract financiers, this can be achieved if government can phase out subsidies which are available at the moment on fossil fuels and transfer those subsidies to renewable energy sector.”
She said the financial sector would like to see government mitigating political and regulatory investment risks associated with investments into the sector.
She said if government can work on the mentioned concerns, then there can be greater interest to finance invest into the renewable energy.
Malawi Energy regulatory Authority (Mera) chief executive officer Collins Magalasi said yesterday in an interview that as a regulator, it facilitated smooth regulations that entices more investment into the renewable energy sector.
He said government made the renewable energy sector among the priority sectors to ensure significant investment is attracted as a way of solving energy challenges facing the country.
Said Magalasi: “Renewable energy is a fresh area of investment, it’s an opportunity for investment, with the technological developments that we have at the moment, renewable energy investment is becoming cheaper. It sounds debatable on the introduction of subsidies on the renewable energy sector.
“As a regulator we have developed regulations and programs for renewable energy for every investor interested in the renewable sector. Government has listed renewable energy as a priority sector in the country. What it means is that the investor will have access to enticing remedies such as tax holidays and everything. As a regulator we have got specific guidelines developed to support this particular industry”.
He said because of the scale, most investors would like to do an off-grid arrangement so that renewable energy can be put up anywhere across the country and that there is a conducive environment to make renewable energy attractive.
In an interview Renewable Energy Industries Association of Malawi executive director Ron Kabvina said the industry shares recommendations as made by the financial sector to ensure the level playing field.
He said there is greater interest by players in the sector to invest across the country but investments are being hampered by lack of capital as bank’s are oftentimes coy due to uncertainties that at times come along with such investments.
Among other things, Kabvina said the association has found a global clean energy financier – Private Financing Advisory Network (Pfan)–which supports clean energy and climate change adaptation entrepreneurs access to finance by providing them investment–ready support. The firm supports entrepreneurs through its network of local and internationally based finance and technical coaches whom are allocated to qualified projects.