The Consumers Association of Malawi (Cama) has asked the government to consider dissolving the Electricity Generation Company (Egenco), saying it is contributing to the country’s high electricity tariffs.
But the Parliamentary Committee on Energy has since rated the proposal as retrogressive.
Cama Executive Director John Kapito made the call on Monday in Blantyre during a public hearing on a 69.7 percent four-year base tariff increase proposal by Electricity Supply Corporation of Malawi (Escom).
Kapito based his argument on the lowering in the proposed tariff hike from 99 percent to 69.7 in the aftermath of the dissolution of Power Market Limited.
“If we dissolve Egenco, it [the tariff ] may reduce further to 35 percent. We are just funding institutions. The cost is just so huge that Malawians are not ready to fund,” Kapito said.
But Chairperson for the Parliamentary Committee on Energy and Natural Resources Werani Chilenga said in an interview on Tuesday that dissolving Egenco would be retrogressive.
“We cannot go backwards. The unbundling of Escom created independent power (IPPs) producers; so, dissolving Egenco means you are getting rid of all IPPs which are not on,” Chilenga said.
He also rated Escom’s proposed 69.7 percent base tariff increase proposal as valid.
Principal Secretary in the Ministry of Energy, Alfonso Chikuni, said the government has not brought the issue for any discussion.
Around 2018 government-driven reforms that were implemented through the finance and technical support from the Millennium Challenge Corporations included unbundling of the Energy Sector.
The main objectives of the unbundling were to streamline function to bring about efficiency and to tap into the private sector investment and effectiveness. However, although the donors did not oppose the unbundling, they observed that the sector outreach was relatively small to warrant unbundling.