Escom overhaul on cards

Minister of Energy Newton Kambala told journalists in Blantyre yesterday that the newly appointed board of Electricity Supply Corporation of Malawi (Escom) is reviewing the turnaround strategy for financial sustainability of the power house.

The minister assured the public, during a briefing, to expect improved services at Escom, which in recent times have been below par.

“There have been complaints of long-waiting period for connections to be done; complaints on slow response to faults and rampant corruption. Some of these problems have been as a result of shortage of financing to sustain such operations of the company.

“Government has been receiving these complaints and has engaged Escom to embark on a project to clear all connection backlog by June 2021,” said Kambala, who was accompanied by Escom chief executive officer Allexon Chiwaya at the news conference.

In addition, Kambala said government is working with the Escom board of directors to turnaround the situation as the board has been fully appointed.

He said in continuing with the reforms, his ministry intends to restructure governance of rural electrification and renewable energy in the country.

“Specifically, the ministry intends to establish the Rural Electrification Agency (REA) that will be mandated to implement rural electrification activities using both grid and off-grid solutions. The agency will also be responsible for management of renewable energy and critical to acceleration of electrification in the rural areas,” he said.

In managing the liquid fuel and gas industry, he said, government constructed a 60 million-litre facility operated by National Oil Company of Malawi (Nocma), which was meant to cover 60 days at the time the country was consuming one million litres every day.

“However, the daily consumption of fuel has significantly increased from one million litres in 2016 to 1.5 million litres per day. This has reduced the fuel holding capacity of the nation from 75 days to 50 days,” Kambala said.

The minister said government’s decision to establish the strategic fuel reserves was bearing fruit because since the fuel crisis in 2012, there has not been any fuel shortage in Malawi.

“It has been proven that government alone cannot bring about the much needed improvements in the provision of power to the industry and the population. A policy shift was, therefore, made to liberalise the sector and allow the participation of private sector.

“This was done through the unbundling of Escom. In order to attract private investors in generation, government carved out generation function from the old Escom and established Egenco,” he said.

Kambala said at the moment there are seven Independent Power Producers (IPPs) who have signed Power Purchase Agreements (PPAs) and are developing power plants to supply to the national grid.

He disclosed that JCM Matswani Solar Group intends to bring 60 megawatts (MW) at Salima to be commissioned in April 2021 and 20MW at Golomoti to also be commissioned next year.

The minister said other companies are Atlas Kanengo Project, whose 20MW is to be commissioned in 2021; Quantell Renewable Energy Bwengu Solar’s 50MW to be commissioned in 2022; Droege Mzimba Wind Farm, whose 50MW will be commissioned in 2023 and HE Power Mbongozi with 41MW capacity to be commissioned in 2025. He said on the other hand, Egenco was also doing well to increase its generation capacity.

“Under the Public Private Partnership, Egenco is developing Mpatamanga Hydro Power in collaboration with the International Finance Corporation of the World Bank. It is expected to cost close to $1 billion and will produce 350MW.

“Egenco is also expanding Wovwe Hydro Power Station. The feasibility study of Wovwe showed that the station has a potential of

 doubling its capacity. Egencohas launched a consultancy to further study the possibility of expanding Wovwe with an estimated 4.5MW,” he said. doubling its capacity. Egenco

The minister said government was aware that a number of investments in the energy sector have delayed because of the absence of Malawi Energy Regulatory Authority (Mera) board.

“I wish to report that the full board has been appointed and has gone through the process of confirmation by Parliament. We are hopeful that all the candidates will excel and will clear all outstanding issues pending at Mera.

“This will be followed by a transparent process of putting a credible executive management in place,” he said.

Energy expert Grain Malunga said it was too early to judge how the new government is performing on its plan to revamp the energy sector. He said there were several things to look into, including power purchase agreement which is not concluded yet.

Malunga, a former minister of Energy, said local investors also struggle to venture into the sector as local most banks have been unable to support them, adding it requires government support to promote the local investors