The United States and Malawi governments have reached an agreement that will bring $36.7 million in US Overseas Private Investment Corporation (Opic) loans to build a 26 megawatt (MW) solar power facility in Nkhotakota District.
A statement from the US Embassy says by signing agreement on international financing for the project, the Government of Malawi unlocks the potential for up to $1 billion in future private sector investment in Malawi.
The statement says the solar project leverages state-of-the-art power grid and power sector reforms that were part of the US Millennium Challenge Corporation (MCC)’s first compact in Malawi.
The Nkhotakota solar power facility will be one of the first two projects spearheaded by Independent power producers, a private sector breakthrough in Malawi and a top goal of the MCC’s first Compact.
US Ambassador, Robert Scott, stated that financing this deal has the potential to attract more private sector investments from international finance institutions.
“The US private sector is committed to Africa. Whether US firms are exporters to the continent, source goods and services from Africa, or invest in its burgeoning markets, they are in this relationship for the long haul,” Scott said.
US businesses made more investments in Africa than businesses from any other country in 2017, according to EY Global’s 2018 Africa Attractiveness report.
And many of those investments are as much about social impact as they are about financial and economic opportunity.
The benefits to African countries include: generating local taxes and income; producing local goods and services, creating local jobs; supporting technology transfer and adaptation; and building physical and institutional infrastructure.
The statement says Opic alone could bring up to $700 million in financing to private sector deals in Malawi adding that in the near future Opic will complement its portfolio with equity investments.