Malawi to receive €20 million grant for Malawi-Mozambique power interconnector project
The Government of Malawi is set to receive a grant worth €20 Million from the European Union (EU) in collaboration with Kreditanstalt fÜr Wiederaufbau (KfW). The grant will go into the Malawi-Mozambique interconnector project.
This project will connect Malawi to the Southern African Power Pool (SAPP). This will help the country in solving electricity problems that it is facing currently. Malawi will also be able to buy electricity from the SAPP regional market. Electricity will be imported from Mozambique and South Africa to Malawi. The two electricity market countries are willing to sell 150 megawatts in excess from South Africa and 50 megawatts from Mozambique. The project will see the construction of a transmission line stretching to 218 kilometers between Matambo, Tete Province in Mozambique and Phombeya area in Balaka. The transmission line will have a voltage of 400kV.
European Union Ambassador Marchel Germann cautioned the government against dwelling on the electricity connector linking Malawi to Mozambique as the only lasting solution. Ambassador Germann advised the government to invest in other solutions for electricity supply challenges in the country. He outlined renewable energy sources like solar which alone can provide electricity solution for the country. He also pointed out the need to have lasting solutions that impact positively on the growth of the economy. Ambassador Germann noted that Malawi could not do much to solve power problems as it not currently connected to SAPP. However, the connection to SAPP market would allow the Island to reduce its power vulnerability while providing adequate electricity to the people.
Mr. Germann pointed out that Malawians would be able to acquire energy at lower rates. This is compared to the current case where people spend almost US50 cents per kilowatt from other power sources during blackouts. Meanwhile, Malawi’s Electricity Supply Corporation (Escom) charge power at US8 cents per kilowatt. Escom Chief Executive Officer, Mr. Alexon Chiwaya revealed that discussions on cost-effective tariffs were ongoing with Malawi Energy Regulatory Authority (Mera). Mera which is Malawi’s energy regulatory body would make the final decision on the new tariffs.
Thomas Duve who is KfW director for Southern Africa said that they are ready to issue the grant to fund the entire project. KfW will also provide €30 million to the government of Mozambique for their part of the project. Mr. Duve said that KfW will sign contracts with both Malawi and Mozambique governments soon. He also noted that they would look for additional funds if the project costs more than planned.
Chimwemwe Banda, Chief Director of Ministry of Natural Resources, Energy and Mining expressed appreciation to the investors for the project. The project is aimed at ending electricity challenges in Malawi with only 9 percent connected to the national power grid currently. Banda revealed that the government had already finalized discussions with other independent power providers and operations would start soon. The entire power project will cost US $127 million.