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MCC energy project a catalyst for investment

The Millennium Challenge Account-Malawi (MCA-M) chief executive officer Susan Banda has said the $350.7 million investment in the energy sector by the Millennium Challenge Corporation (MCC) is just part of the solution to the country’s energy woes.

Banda, speaking at an interaction with media in Blantyre Monday, said there is still a lot of work that needs to be done to solve the current spate of intermittent power supply because the compact money will only help to rehabilitate two parts of the power backbone.

“We are providing a catalyst for other investments to come in, donors or government to do their bits. On the question of blackouts, they will still continue. There has been no investments made [in the energy sector] over the years,” she said.

Banda noted the need to maintain the generation and transmission backbone of the country’s energy sector.

Malawi’s intermittent power supply has been a thorn in the flesh of businesses, affecting production purposes. The Electricity Supply Corporation of Malawi (Escom) produces about 286 megawatts of power against a suppressed demand of 350 megawatts.

By the end of the five-year compact term, the infrastructure development activity coupled with government’s commitment to complete construction of Kapichira II to, add 64 megawatts to the power grid, will increase the generation capacity to 356 megawatts from 286 megawatts.

Additionally, the network throughput capacity will jump to 410 megawatts from 260 megawatts and the distribution capacity to 1 078 megavolt ampere (MVA) from 868 MVA and a reduction of total system losses to 18 percent from between 20 and 25 percent.

MCC resident county director Oliver Pierson said the US government is excited at the opportunities that will arise from the energy sector through the funding, stating that the current state of power is a constraint to poverty alleviation and economic development.

“This is the largest single investment that MCC has ever made,” said Pierson, drawing lessons from Namibia where he said they have achieved more.

According to the MCA-M compact activities report, under the power sector revitalisation project, infrastructure will be developed through rehabilitation of existing generation capacity and strengthening, upgrading and modernisation of the transmission and distribution networks systems.

Escom will also be rebuilt into a financially strong, well-managed utility and developing a regulatory environment that supports public and private investment in new generation capacity and expanded access.

The compact funding will also support the refurbishment of Nkula A hydropower plant to improve availability of power by reducing outages and maximising power plant’s output.

On transmission network upgrade, the funding will support to upgrade them to 400 kilovolts (KV) from 132 KV from Nkula B hydropower plant to Lilongwe which covers the Southern and Central regions and also a 132 KV line parallel to existing 66 KV and 33 KV lines from Chintheche to Luwinga in Mzuzu and from there to Bwengu in Mzimba.

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