The Independent Power Producers (IPPs) that government is currently engaging have committed to add 4,000 megawatts to Malawi’s generation capacity, Minister for Natural Resources, Energy and Mining, Bright Msaka, has disclosed.
Msaka also dismissed reports that the two sides struck a stalemate on the deals. He said discussions are progressing well with the investors looking at their financial model.
He also said the government is looking at power solutions which would enable the country get power at optimal price.
“Power purchase agreements will be arrived upon after all modalities have been consulted. We certainly must have power and power must cost us money but we will not get the power at excessive price and so we are negotiating,” said Msaka.
But he could not attach a specific time frame during which government expects to finalise the discussions with the independent power companies arguing that the period will be vary depending on the IPPs source of power generation.
The IPPs are expected to use solar, renewables, biomass, liquid fuels and coal to generate the additional power supply.
“The solar ones will require about a year or so of gestation period, so we expect the solar power projects to kick off between mid this year to next year. Hydro power stations take longer; similarly the coal plants will require more time,” he said.
But Msaka said government expects all the processes to be finalised in five years’ time.
Malawi’s national power supply currently stands at 351 megawatts against a forecast maximum demand of 360 megawatts.
And according to Msaka it is hoped that once the IPPs start their work, blackouts will be minimised.
Tapping into the Electricity Act of 1998, government broke the monopoly of its company, the Electricity Supply Corporation of Malawi (Escom), by offering separate sets of licences for generation, transmission and distribution, thereby allowing private sector participation.
The USA-based Millennium Challenge Corporation (MCC) is supporting Malawi with a US$350 million grant to help liberalise Malawi’s energy sector with the hope of achieving up to 1,000 megawatts of power supply.
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