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European Union grants Malawi K16 billion for electricity project

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The European Union (EU) and Kreditanstalt für Wiederaufbau (KfW) yesterday signed an agreement where the latter will provide a €20 million (K16 billion) grant to the Malawi Government for the Malawi-Mozambique interconnector project.

Completion of the project will link Malawi to the Southern African Power Pool (Sapp) where the country will be able to purchase electricity from the regional market and ease electricity challenges prevailing in the country.

It has transpired that South Africa is willing to sell Malawi in excess of 150 megawatts while Mozambique has committed 50 megawatts.

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The project consists of the construction of a 218-kilometre transmission line with a voltage of 400kV between Matambo in Mozambique’s Tete Province and Phombeya in Balaka.

Marchel Gerrmann, stressed that Malawi has to start looking for long-term solutions to the power challenges that have for a long time impacted on the economic growth of the country such as Sapp.

“As of now, from an electrical point of view, Malawi is an island, it has not connected to the Sapp and there is not much the country can do but only short term solutions, so, by being connected to the power pool, Malawi could draw energy and reduce its vulnerability,” Gerrmann said.

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He added that the country can get the power at a much lower rate than the current situation where people are spending nearly 50 cents a kilowatt from alternative sources during blackouts while charges of Electricity Supply Corporation of Malawi are at 8cents a kilowatt.

KfW Director for Southern Africa, Thomas Duve, said that, as implementers, they are ready to provide funding for the entire project as they will also be providing €30 million to the Mozambican Government for their part of the project.

“We need to sign the contract with both governments pretty soon to commence the project, but if costs will be high during the project, we will have to look for additional funding but we hope this will not be the case,” Duve said.

Chief Director in the Ministry of Natural Resources, Energy and Mining, Chimwemwe Banda, said that the government is very appreciative of the initiatives development partners have taken to help end power challenges facing Malawi.

He said the government in itself has finished discussions with other Independent Power Producers that will start operations soon.

The entire project will cost $127 million.

Malawi is current facing serious power outages. Only nine percent of the country is connected to the national grid.

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