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Loan guarantee derails Lilongwe-Salima water project

Williams Banda

Werani Chilenga

Khato Executive Officer Mungozi Munyani has told the Parliamentary Committee on Natural Resources and Climate Change that the Malawi Government is yet to sign a loan guarantee with possible financiers for the Lilongwe Salima Water Project.

This means the initiative cannot kick off as the loan guarantee would open taps of funds for loan providers interested in bankrolling the same.

Munyani said this during a virtual meeting with committee members.

Committee chairperson Werani Chilenga said members learned from Khato that the contractor submitted all designs and required documentation in August this year.

“We have heard the Khato part and we will be engaging the Ministry of Finance on the matter,” Chilenga said

But Finance Ministry spokesperson Williams Banda said Treasury could not be blamed for delaying anything.

“We are at a stage where technical details and designs of the project are being looked into by engineers from the contractor’s side and from the line ministry. Once this process is completed, it will remain with the Ministry of Finance to enter into financial negotiations,” Banda said.

He added that the government could not go into talks before technical issues were finalised, hinting that the value of a project sometimes changes after factoring in technical issues.

The development comes barely three days after Chilenga’s committee recommended that the government should revoke all mining licences after its representatives met with stakeholders such as Illomba, Lotus Mining Company, civil society organisation leaders, and officials from the Ministry of Mining and the Department of Parks and Wildlife.

Chilenga cited failure by some miners to invest in corporate social responsibility initiatives, deep-rooted corruption and lack of transparency on mining activities.

However, Mining Ministry Principal Secretary Joseph Mkandawire indicated that the suspension of all mining activities would be counterproductive.

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