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Minister talks tough on dormant IPPs

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Energy Minister Newton Kambala has come out to condemn some Independent Power Producers (IPPs), stressing that they risk termination of their power generation and sale agreement with government if they do not commence their projects within the next two months.

He was speaking when he toured Mulanje Hydro Limited (MHL) as well as Cedar Energy Limited premises in Mulanje District.

Government signed Memorandum of Understanding and Power Purchase Agreements with more than seven IPPs but so far, only two have implemented the projects.

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Kambala said he had sent a warning letter to the IPPs two months ago, giving them four months to implement the project or risk termination of the agreements.

“We have already sounded a warning to them that if they do not do anything in the next two months, we have to review the Power Purchase Agreement and look at how we can bring in some serious investors because Malawians cannot keep waiting,” Kambala said.

Mulanje Hydro Limited has already started selling electricity to Electricity Supply Corporation of Malawi (Escom) with an 8.2 Megawatts capacity but is currently generating about 2 Megawatts.

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The plant was commissioned in December 2019 along the Rio and Ndiza Rivers in the district.

The company’s Managing Director Ian McKersie said that currently, there is no storage of water and as such, generation depends on the flow of the river.

“At this time, we generate at our lowest levels but when the rains are back we will be generating at full par and we are planning to have another project like this which is expected to be complete by 2021,” MacKersie said.

On the other hand, Cedar Energy Limited which is pursuing a 3.1 Megawatts project, is expected to be completed in the first quarter of next year.

Currently, of all the IPPs, only Mulanje Hydro Limited and Agrekko have implemented and commenced their projects.

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