Malawi Energy Regulatory Authority (Mera) says it is mediating a dispute over unpaid bills due to Electricity Generation Company (Egenco) to be paid by power supplier Electricity Supply Corporation of Malawi (Escom).
In August 2020, Egenco lodged a complaint to government that Escom owed it about K53 billion in unpaid electricity bills.
Egenco argued that it was failing to increase electricity generation due to the bill which Egenco chief executive officer William Liabunya described as a constraint in their pursuit to generate more electricity.
On August 25 2020, Vice-President Saulos Chilima, who is also Minister of Economic Planning and Development and Public Sector Reforms, intervened on the matter.
He announced that going forward, Escom should first make a part payment of K11.7 billion out of the K53 billion by December 31 2020.
The rest of the arrangement was that 60 percent of the balance or K25.2 billion, will have to be paid by December 31 2021 and that the Ministry of Finance would facilitate that Egenco issues a credit note for the remaining balance.
A year down the line, Escom public relations manager Innocent Chitosi said in an interview that the matter is under arbitration by Mera.
He said: “Escom is not blaming itself nor Egenco for this situation. It is a normal development arising from reform.
“Escom being a carrier and deliverer of electricity requires that it pays for what has been dispatched, delivered and received.”
On her part, Mera spokesperson Fitina Khonje confirmed that the regulator was mediating the dispute.
She said: “Government took up this matter. The issue is also under arbitration.
“We do not have the time-frame in terms of when the arbitration process will be concluded. But once concluded, the public will be informed accordingly,” she said.
Public Sector Reforms public relations officer McCarthy Mwalwimba said the dispute between Escom and Egenco is an issue of public concern.
“This issue concerns many stakeholders apart from the two institutions. So, we have consulted the parent ministry, Ministry of Energy,” he said.
To facilitate trading between Escom and Egenco, two instruments were developed, namely tariff methodology and Power Purchase Agreement (PPA).
The PPA between Escom and Egenco was signed in October 2018, but was backdated to March 2018.