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Treasury signs water project term sheets

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Werani Chilenga

By Wezzie Gausi:

The Ministry of Finance has finally signed term sheets that were submitted by Khato Civils for implementation of the $313 million Salima-Lilongwe Water Project.

The term sheet is a non-binding agreement that shows basic terms and conditions of an investment.

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Treasury official Nations Msowoya Thursday told Parliament’s Committee on Natural Resources and Climate Change that the process had taken longer than expected because of the time they spent on finding a financier that could meet the government’s standards.

He said the financier had been found and negotiations were at an advanced stage.

“For more details, the Minister of Finance will, in the budget statement he will present in February, address the nation on progress made but, as things stand, we have made tremendous progress.

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“The project is still pegged at $313 million and we are still negotiating [with those involved] to come up with the final amount. That will only be known when everything has been finalised,” Msowoya said.

Khato Civils Chief Executive Officer Mongezi Mnyani said they were happy that the government had finally signed the term sheet.

He said they were drafting the detailed loan agreement sheet that would determine the final outcome on finances and details about when the project would start.

“We have had delays in terms of how the project was moving. Now that the term sheet has been signed, we are sure that we are moving in the right direction. We were asked by the government to find the financier and we did just that. Now we are waiting to finalise all the negotiations,” Mnyani said.

Committee chairperson Welani Chilenga commended parties involved in the issue for registering progress.

He said the Salima- Lilongwe Water Project was sustainable, unlike the Diamphwe initiative which the World Bank touts.

“We, as a committee, pushed very hard to have this project materialise. We are happy that there is progress made and I must say that no one will come to Malawi and dictate to us about where to pump water as we know best what the country needs.

“We are only urging the two entities to fast-track their negotiations so that the project should commence this year,” Chilenga said.

Recently, in a letter dated November 2 2021, Mnyani indicated that delays in signing the term sheet was embarrassing the company and raising doubts about its credibility and seriousness to raise the loan facility for the project.

He informed Treasury and parliamentarians that they had done everything to secure the loan for the project but that actions of Ministry of Finance officials were jeopardising prospects of implementing the project.

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