MCC says energy compact on track

The US government’s Millennium Challenge Corporation (MCC) is impressed with the completion of the first year of the $350 million (K148 billion) energy compact implementation with Malawi despite concerns on Cashgate.

MCC resident country director Oliver Pierson, briefing journalists in Lilongwe this week on the progress of the five-year project and planned activities in 2015, cited Malawi’s peaceful democratic transition following the May 20 Tripartite Elections as an impressive score on rule of law.

He said Malawi scored highly on the compact’s 20 eligibility indicators, which hinge on ruling justly, investing in the people and economic freedom. The country scored 16 out 20.

“Malawi’s eligibility for the compact is good performance for our set of indicators. During the 2013/14 fiscal year, Malawi performed beyond the median level.

“Strong performance by peaceful democratic transition and political rights was a good score. Cashgate, of course, is a real challenge and we urge Malawi government to ensure that performance on the corruption indicator is above the minimum,” said Pierson.

He said the new score is due for release in November this year, saying it would be interesting to watch Malawi’s performance on corruption.

Pierson said in the 2013/14 fiscal year analysis, Malawi scored poorly on inflation, fiscal policy, access to credit and business start-up.

But he said the country was already enjoying some benefits of the compact, including reduction of power outages and expressed hope that the compact will remain on track.

Pierson said MCC was excited upon completion of the first year, adding that he was optimistic the programme will transform lives and greatly contribute to Malawi’s development.

“One question we are always asked is why are things moving slowly? The answer is, we are still on the right track and this is a five-year programme. It is a large and complex programme too, but we are doing everything possible to succeed.”

Millennium Challenge Account (MCA-Malawi) chief executive officer Susan Banda said the compact will in 2015 carry out several activities in the power sector revitalisation project as part of bringing efficiency and sustainability of the power sector through a $257 (K109 225) infrastructure development component.

She said MCA Malawi is currently focusing on improving generation, transmission and distribution of power, adding that MCA will soon float tenders to award contracts to engineers ahead of implementation in May 2015.

“Additionally, under the power reform sector project aimed at improving Escom’s financial and operation performances will in 2015 hold activities to improve operations and financing, including a power market study and capacity building activities,” said Banda, who outlined progress made so far.

The MCC compact previously went off track in 2011 and 2012 due to concerns of good governance and human rights during former president the late Bingu wa Mutharika’s administration before it was restored.