By Benadetta Chiwanda Mia:
The aspiration to increase national electricity generation capacity to 1000 megawatts (mw) at least by 2025 is apparently dimmed by several bottlenecks facing min-grids development projects.
They include low access to finance, and non-viability of some sites where the projects were being earmarked for.
Currently the state-owned Electricity Generation Company has a total installed generation capacity of 441.95mw, with 390.55mw from hydro power plants and 51.4mw from thermal power plants.
Slow progress seems to have been registered towards increasing the generation capacity.
Ironically, the Integrated Resource Plan (IRP) 2017 projects that demand for electricity will increase to 1200mw and 2500mw by 2025 and 2035, respectively.
Ministry of Energy spokesperson Austin Theu on Monday said the government eyed establishing 50 clean-mini-grids by 2025.
But due to financial constraints, among other factors, the target might be missed.
“Financial constraint is a major challenge delaying investments in mini-grid construction as they are capital intensive,” Theu said.
The country had set the target in the Malawi Renewable Energy Strategy of 2017 as one way of increasing generation capacity and achieving universal energy access, to capacitate its economic and social activities.
Theu said, so far, the country has 12 operational mini-grids in Dedza, Mchinji, Rumphi, Mulanje, Chikwawa, Nsanje, Zomba and Mzimba, with a combined capacity of 550 kilowatts.
He added that another mini-grid with a capacity of 60 kilowatts is under construction in Ntcheu District.
“The ministry prepared feasibility studies and detailed designs for 13 sites and preliminary assessments for 62 sites,” Theu said
However, Theu revealed that non-viability of some sites is among the challenges, making other mini grid sites fail to attract private investment.
“There is competition with grid extension in some areas targeted for mini-grids which are later included in plans for the extension of the national grid. This uncertainty has also affected the financial viability of mini-grid projects and also lead to delays in their deployment,” Theu added
He then noted that although the government is on track, the 2025 target will likely be missed due to the existing challenges.
A 2023 World Investment Report on Investing for Sustainable Energy Access for All, released by the United Nations Conference on Trade and Development, highlighted that poorest countries continue to struggle to attract foreign direct investment in the energy sector beyond the extractives sector.
Renewable Energy Industries Association of Malawi President Brave Mhone described the 2025 target on mini-grids as ambitious but difficult to achieve, given the country’s resource capacity.
“This is where we might also need the government and partners to come together and strategically look into how to mobilise resources and make sure that those resources are complementary to each other to achieve one common goal,” Mhone said.
Mhone has therefore suggested the need to create a conducive environment to attract more investors and private sector players.
“One of the major challenges relating to mini-grids is the procurement of the equipment. We are importing everything, so it means we need to have strong, hard currency availability,” he said.
