• September 26, 2022 7:35 pm

Chakwera says the $1billion electricity deal to complement the 1000MW target by 2025

Sep 8, 2022

Malawi’s journey towards attainment of 1,000 megawatts by 2025 is on track following the signing of  $1 billion financial agreement with the World Bank’s  IFC Group.

Malawi President Dr Lazarus McCarthy Chakwera while addressing the investment forum said the signing of the agreement is a milestone towards achieving the vision.

Chakwera cited various efforts which Malawi Government is already undertaking.

The President cited the 60 million dollar rehabilitation of the 130MW Kapichira Power Plant which suffered damage from Tropical Storm Ana a few months ago and triggered the current spate of blackouts.

“But with this investment, that power plant will be back on line by Christmas and we will be back on track with our goal to raise Malawi’s power generation capacity from less than 400MW to 1000MW by 2025.

“It is in our quest of this goal that just yesterday my Government also signed a binding agreement to construct a 350MW Hydro Power Plant at Mpatamanga, with money from a consortium of financiers led by the International Finance Corporation of the World Bank Group,” he said.

The President said ,that in this context, the current blackouts are a temporary headache that will be cured by the end of the year.

“The real story in the end, when all these new power plants are completed, will be that my administration tripled the power base of the country and ended blackouts for decades to come, thus creating endless avenues for electricity-dependent economic activities that have never been possible in this country,” he said.

Malawi Government successfully negotiated a $1 billion financing commercial agreement with International Finance Corporation (IFC) to undertake the co-development of the Mpatamanga hydropower project.

In a joint statement the agreement, signed under Malawi’s Public-Private Partnership framework, concludes the selection process undertaken by the Government of Malawi to competitively select a private sector partner to finance, build, and operate the Mpatamanga hydropower plant.

IFC worked closely with the Government of Malawi to support the early-stage project development and provided funding for activities that allowed the government to launch the competitive tender process.

Located on the Shire River, the 350-megawatt (MW) facility will be a first-of-its-kind in Malawi.

The generation facility is composed of two plants – a 309 MW peaking plant and a 41 MW downstream plant.

The project is expected to contribute to reducing energy shortages and enhancing energy security in Malawi.

According to the statement, the 309 MW plant with its reservoir storage is designed to provide much needed energy during peak demand hours of the day and overall grid stability with its ability to ramp up or down production to meet actual demand.

Malawi Minister of Energy Ibrahim Matola said: “The 350 MW Mpatamanga Hydropower project will not only double the installed capacity of hydropower in Malawi, but also improve power supply security, provide opportunities for increased renewable energy generation capacity in the country and contribute to controlling the flow of the Shire River downstream of the power plant. The Government of Malawi is indebted to its partners in achieving this milestone, which is a major step in the development of this project,”

According to the statement IFC supports the Government of Malawi’s goal to accelerate access to affordable clean energy.

IFC Regional Director for Eastern Africa Jumoke Jagun-Dokunmu says Mpatamanga Hydropower plant has the potential to grow Malawi’s electricity infrastructure and connect thousands of rural and remote households while also spurring green, inclusive, and resilient growth in the country.

Scatec Chief Executive officer, Terje Pilskog, said: “This is a significant development in the realization of the Mpatamanga project. We are excited to build on our hydro portfolio in Africa – and are proud to have finalized development plans alongside our partners. The country of Malawi will receive a significant investment into its power sector, which in turn will stand to benefit a major portion of the nation’s population. We look forward to reaching further development milestones for this project – and contributing to Africa’s renewable energy journey,”

IFC is a member of the World Bank Group which remains the largest global development institution focused on the private sector in emerging markets. IFC work in more than 100 countries, using their capital, expertise, and influence to create markets and opportunities in developing countries.

In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises.

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