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Government unclear on gensets contract

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The government remains elusive on whether it intends to facilitate renewal of a contract for use of diesel generators from South Africa-based energy company, Aggreko.

Speaking after touring Electricity Supply Corporation of Malawi (Escom) in Blantyre Tuesday, Minister of Natural Resources, Energy and Mining, Binton Kutsaila, said it was too early to determine the next move on the deal.

This comes at least four months before expiry date of the contract.

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The contract for generators at Chichiri in Blantyre and Kanengo in Lilongwe ends in January while the one for generators in Kasungu ends between June and July 2019.

In 2017, Escom leased 84 gensets from Aggreko, which are required to be producing 78 megawatts for six hours each day.

Kutsaila said the determination on whether to renew the contracts would be made when the time comes.

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“We will do everything possible to make sure that, before the Aggreko diesel generators are released, we have enough capacity to provide Malawians with adequate electricity. We are not in a hurry to end the contracts and leave Malawians in the dark, we will make a decision when the time comes,” Kutsaila said.

Escom Chief Executive Officer, Alexon Chiwaya, added that there was more economic sense in using the diesel generators currently as the economy is more productive than the time they were load shedding.

“If the Independent Power Producers that we have signed Power Purchase Agreements with do not come online in time before the contract with Aggreko ends, then we have to think twice on the contract with Aggreko or communicate to the public the challenges and solutions we propose,” Chiwaya said.

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