Energy Generation Company (Egenco) says it has not given up on construction of the 300 megawatts (mw) Kammwamba coal-fired plant in Neno District despite that the money for the project in nowhere in sight.
The project was expected to be financed by a loan from Export and Import (Exim) Bank of China to the tune of $667 million (about K670 billion), with Malawi required to source $104 million (about K105 billion) as commitment fee.
However, China’s recently adopted policy on coal use has cast a big shadow on the initiative.
On September 21 2021, Chinese President Xi Jinping announced at the United Nations General Assembly that China would no longer build any new coal-fired power plants outside China.
Instead, he said, the Asian giant would step up its support for developing green and low-carbon energy in developing countries.
- Advertisement -
And, speaking at a public hearing session on Friday— which Malawi Energy Regulatory Authority organised to get stakeholders’ views on an application by Electricity Supply Corporation of Malawi to raise electricity tariffs by 69.7— Egenco Chief Executive Officer William Liabunya said the government does not have any ready money and, thus, they are looking for a joint venture.
Liabunya said a feasibility study of the project, which cost the government K2.5 billion, was already concluded
But Liabunya said they have not given up on the project, which was conceived over a decade ago.
“What we should also understand is that, with the current campaigns that are happening against coal, investors are becoming cautious in investing in that technology, especially coal. So we, as a government company, do not have ready money that we can invest in such a project. We had put it into phases of 100mw each and, at that time, we were hoping that by 2023-24, we would have 100mw.
- Advertisement -
- Advertisement -
“That said, we could not get capital we could invest [in the project]. And, therefore, we are looking for a joint venture partner who can bring in part of the investment. We have not given up; we are working with the Public Private Partnership [Commission] so that we can get an investor we can work together with on such an investment. So, it’s a project that we are still working on; feasibility study was already done,” he said.
The plant, estimated to have a lifespan of 30 years, would use coal from Moatize in Mozambique.
Meanwhile, energy expert from Mzuzu University Chrispin Gogoda has said coal is baseload energy— power energy that is guaranteed—and that, as such, Malawi still needs to find alternatives to finance the project.
Gogoda said much as renewable energy is clean, it cannot be relied upon for the country to meet all its power needs.
“Coal is not clean energy but all developed countries have coal-fired plants. So, sometimes it is a question of, ‘do we want to develop or not?’ You think of India; it was told the same story. But the government stood its ground to say it would only stop when they develop to the level of other countries. If you look at power generation projections for countries like the United States, they still have coal in their power generation mix. The question is, why are they not taking out coal from the power generation mix?” he queried.
Egenco has a total installed generation capacity of 441.95mw.
