Independent power producers (IPPs) have continued to enter the country’s power sector to help fill up the power supply deficit which is a dent on industrial production.
As part of ongoing reforms in the energy sector, government has opened up the sector to break the monopoly of Electricity Supply Corporation of Malawi (Escom) which has dominated the power sector for decades.
Thus far, government has signed memoranda of understanding (MoUs) with 27 IPPs to boost power supply from the current 351MW produced by Escom against increasing demand from both industries and domestic users.
Last week, another IPP—Greenheart Energy Limited-—entered the Malawi market to generate and sale 30MW of power in the country.
Minister of Natural Resources, Energy and Mining Bright Msaka, in an interview last week, said the development will help to address power supply challenges the country has been facing for a long time.
The MoU signed with Greenheart Energy Limited involves the generation and sale of electricity by means of solar photo voltaic (PV) and rolls royce heavy fuel oil (HFO) hybrid power plants and containerised solar PV and battery power plant for rural electrification.
The firm’s officials initially met their counterparts from the ministry at The Global African Investment Summit (TGAIS) in December 2015 in London where they discussed modalities for the project.
Following the meeting, the company was invited to Malawi for further discussions which have resulted in the signing of an MoU.
Greenheart Energy Limited chairperson and company director Mike Eyre, in an interview in Lilongwe, said they have started conducting pre-feasibility studies while a full feasibility study is expected to start this month.
“We expect to start construction of the power plant early next year, and if everything goes according to plan, we should complete the job within 15 months.
“The electricity generated will be sold to Escom through a power purchase agreement to be designed between the two parties in the coming few months,” he said.
Eyre said the company is planning to bring in one or more solar PV and rolls royce hybrid power plants of approximately 30MW installed capacity at multiple locations.
He said funding for the project is being arranged by Rolls Royce Capital and Greenheart Energy Limited through European Export Credit Agencies with the help of Standard Bank Malawi.
Greenheart Energy Limited has developed, acquired and operated large utility energy businesses in Africa, Central Asia, Latin America and Europe.
The company is currently engaged with Zambia Electricity Supply Corporation (Zesco), a State-owned power company in Zambia.
In Zambia, Zesco is negotiating a similar programme of 200MW of rolls royce bergen power plants and power grid upgrades.
Last month, CDEN, a French company which has projects in Europe and in other African countries such as Rwanda, Chad, Tanzania, Uganda, Guinea and Democratic Republic of Congo also signed a MoU with government to generate about 100MW solar power in the country.