Power woes blamed on Escom monopoly
Malawi will continue to suffer from power outages unless the Electricity Supply Corporation of Malawi (Escom) stops monopolising the sector, commentators have warned.
The experts, speaking in separate interviews with Malawi News, have called on government to deal with the challenges that are holding four companies from starting power generation.
This follows reports that the four companies are facing difficulties to start operations after policy makers argued that the level of electricity connectivity in Malawi does not warrant the establishment of multiple distribution companies because of the size of the country.
Currently, Escom is responsible for generation, production and distribution of electricity in the country.
Acting Chief Executive Officer for the Malawi Energy Regulatory Authority (Mera), Ellias Hausi, said a country of the size of Malawi can only have one transmission company.
“Therefore, other companies can compete with Escom at generation stage. Escom has been open enough in welcoming Independent Power Producers (IPPs) who would want to generate and feed into the Escom transmission system,” Hausi said.
He conceded that the Malawi power market is currently vertically integrated with Escom owning the generation, transmission and distribution segments of the power market.
Hausi said investors can participate as IPPs by investing in the generation segment. In turn, they would sell their power to Escom or can go into bilateral arrangements where they supply power to an individual off taker, such as the mining companies or estates.
“There are so many potential Independent Power Producers who have expressed interest to invest in the generation of electricity. They are discussing with Escom and once successful they will go into Power Purchase Agreements,” he said.
Hausi said, so far, there is no IPP who has concluded any Power Purchase Agreement, adding that those who have generation facilities are, Airports Development Limited, generating 0.8 Megawatts from Solar and is connected to national grid.
An expert in the industry, Gain Malunga, also said Escom should be split into three companies.
“One company will be responsible for generation and from the generating plant to the market in the Northern, Southern or Central region, another company should take over in transmitting.
“When it comes to the clients, a distribution company should be responsible. That will bring efficiency and will also help in keeping the system up-to-date,” Malunga said.
Escom Public Relations Manager, Kitty Chingota, said the sector is liberalised enough and any player is welcome to join the industry.
“We are just a major player generating 351 megawatts and we are not blocking anyone interested to join the sector,” she said.
Public Relations Manager for Malawi Investments Trade Centre (MITC), Deliby Chimbalu, said there are only few companies that have shown interest to invest in the country’s energy sector.
“In terms of electricity generation, we have at least four companies (from 2014 database) that have been issued with an investment certificate to produce electricity from different sources like solar, hydro, biomass and waste,” she said.
Chimbalu disclosed that the companies are from India, South Africa, Australia and Malawi.
She said MITC’s role in the investment facilitation process is to make sure that the investors are given all the necessary requirements for them to set up their businesses in the country and that the speed with which they need to implement their projects is dependent on the responsiveness of the Ministry of Energy.
“As you might be aware, there are several structural challenges that are rocking our energy sector. That is causing some delays for these investors to actualise their investments especially in electricity generation,” she said.
Chimbalu said all the companies are interested in generating electricity from solar power, biomass and waste.
There was no immediate comment from the Ministry of Energy but minister responsible, Bright Msaka, told the National Assembly earlier that with the IPPs, the country will start generating 1900 Megawatts.
Msaka’s statement did not explain when and how these IPPs will start generating power in the country.
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