Government says Escom to be split in May
Minister of Natural Resources, Energy and Mining Bright Msaka says the much awaited unbundling of Electricity Supply Corporation of Malawi (Escom) into two companies will be finalised in May this year.
Government has been implementing a Power Market Restructuring (PMR) which among others involves the unbundling or splitting of Escom into two parastatals; one for generation of power and the other for transmission and distribution.
The expected unbundling of Escom follows an international research of power market models conducted by a Spanish firm AF Mercados. Malawi Government settled for a model which will result into Escom being split into two companies.
Said Msaka: “The reason we are unbundling is to have one single off taker; one company that is going to be buying power from everyone.
“The other part of Escom that generates power will be a different company, selling power to Escom. The reason is that Independent Power Producers [IPPs] would like to sell power to a company that itself is not generating power. The company that is not competing with its own customers.”
He said they are on course and the May deadline will be achieved, adding that all issues that were causing anxiety among employees of Escom have been resolved.
Msaka said all Escom employees have been assured of job security.
“They [employees] will go to the generation company if that is where they are and some will go will go to the transmission company if that is where they are too,” he said.
Meanwhile, government is implementing a Power Sector Reform Project to improve improve financial and operational performance of Escom, including Escom’s turnaround activity.
The PSRP is part of the $350.7 million (about K243 billion) Millennium Challenge Corporation (MCC) compact component.
Currently, government has hired EY to develop a detailed financial plan and to review Escom’s quarterly management accounts.
Government also hired AH consulting to develop Escom Management Information Systems (MIS), but the process delayed due to the unbundling process of Escom.
Earlier, Millennium Challenge Account-Malawi (MCA-M) said Escom turnaround activity aims to restore the parastatal’s financial health. n
