Electricity tariff expected to be raised
Malawians should brace for increased electricity bills despite enduring incessant blackouts that have paralysed business operations and negatively affected the livelihoods of many people across the country.
The increase is inevitable because the Electricity Generation Company (Egenco) needs financing to hire 78 megawatts diesel generators – from the Electricity Supply Corporation of Malawi (Escom) — for the purpose of cushioning the effects of power outages.
Before the earlier deal was cancelled, Escom had proposed a 25 percent tariff increase in order to hire the generators.
Egenco said that they are going to evaluate the increase before implementing the initiative.
“We could only arrive at a tariff increase if we have (sic) made evaluation of the financial proposals. We, therefore, cannot wholesale adopt Escom’s proposed tariff of 25 percent, but we will come up with ours after evaluating the financial proposals and consultations with relevant stakeholders,” said Egenco spokesperson Moses Gwaza
In the last five years, the price of electricity has gone up by over 150 percent.
However, the tariff adjustment will have to get a node from the Malawi Energy Regulatory Authority which is mandated under the law to approve any tariff adjustments in the energy sector.
Delays to hire the generators have brought to light revelations that Escom fraudulently awarded a $74 million contract to Aggreko International – a South Africa-based company— to lease generators urgently needed by this month [October].
The Office of Director of Public Procurement went on to cancel the process, saying the evaluation was manipulated to give an advantage to Aggreko.
It also found that the mandate for power generation no longer falls under Escom but Egenco.
When asked whether Egenco would go ahead to hire the emergency generators since the deadline was already missed, Gwaza said: “The original deadline was October. As Egenco, we took over the process in September. We will proceed to hire the generators because we still have the problem of reduced generation capacity because of the low water flows in the Shire River.”
The emergency generators, he said, are meant to cushion the challenge of insufficient generating capacity.
“So, as long as the problem is there, we will proceed with the plan and try as much as possible to speed up the processes,” Gwaza said.
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