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EU pledges €20m for Malawi-Mozambique power project

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The European Union (EU), in collaboration with Kreditanstalt für Wiederaufbau (KfW), has pledged to provide a €20 million grant to the Malawi government for the Malawi-Mozambique interconnector project.

The project will link Malawi to the Southern African Power Pool (SAPP) where the country will be able to purchase electricity from the regional market and ease electricity challenges that have hit the country hard.

The 20 million euro grant will enable Malawi to import electricity from South Africa and Mozambique.

South Africa is willing to sell Malawi in excess of 150 megawatts while Mozambique has committed 50 megawatts.

The project consists of the construction of a 218-kilometre transmission line with a voltage of 400kV between Matambo in Mozambique’s Tete Province and Phombeya in Balaka.

However, while signing the agreement EU Ambassador Marchel Gerrmann cautioned Malawi government not to dwell on the electricity interconnector between Malawi and Mozambique as the only lasting solution to power supply challenges facing the country.

He said Malawi should consider other renewable power sources, such as solar, which can provide stand-alone power solutions to some of the country’s energy problems.

“Malawi has to start looking for long-term solutions to the power challenges that have for a long time impacted on the economic growth of the country such as SAPP.

“As of now, from an electrical point of view, Malawi is an island, it has not connected to the SAPP and there is not much the country can do but only short term solutions, so, by being connected to the power pool, Malawi could draw energy and reduce its vulnerability,” Gerrmann said.

Gerrmann said the country can get the power at a much lower rate than the current situation where people are spending nearly 50 US cents a kilowatt from alternative sources during blackouts while charges of Electricity Supply Corporation of Malawi are at 8 US cents a kilowatt.

On cost-reflective tariffs, Electricity Supply Corporation of Malawi (Escom) Chief Executive Officer, Alexon Chiwaya, said discussions were underway with the country’s energy regulating body, Malawi Energy Regulatory Authority (Mera), which will have a final say on the tariffs.

KfW director for Southern Africa, Thomas Duve, said as implementers, they are ready to provide funding for the entire project as they will also be providing €30 million to the Mozambican government for their part of the project.

“We need to sign the contract with both governments pretty soon to commence the project, but if costs will be high during the project, we will have to look for additional funding but we hope this will not be the case,” Duve said.

Chief director in the Ministry of Natural Resources, Energy and Mining, Chimwemwe Banda, said the government was very appreciative of the development partners’ initiatives to end power challenges facing Malawi.

She said the government had finalised discussions with other independent power producers that will start operations soon.

The entire project will cost US$127 million.

Malawi is facing serious power outages, with only nine percent of the country is connected to the national grid.

Source: The Southern Times

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