POWER AFRICA IN MALAWI

ENERGY SECTOR OVERVIEW

With a high population density, Malawi has one of the lowest per capita GDPs in the world. The country has the capacity to generate 363 megawatts (MW), though Malawi’s heavy reliance on large hydro is often constrained by drought and low water levels. Moving forward, there is high potential for solar and new hydro technologies to enter into the power market. Malawi’s energy sector has gone through important sector reform efforts recently, including the partial unbundling of the national utility, the Electric Supply Company of Malawi (ESCOM). The restructuring of Malawi’s power market is underway, with strong investor interest and political will for Independent Power Producers (IPPs) to enter the market.

GENERATION CAPACITY

Installed Capacity: 363 MW

  • Hydroelectric: 346 MW
  • Solar: 17 MW

Power Africa New MW to Date

  • Reached Financial Close: 6 MW

CONNECTIONS

Current Access Rate: 12%

  • Rural: 5% Urban: 46%

Households without Power: 3.2 million

  • Target: 30% Access Rate by 2030

PA New Grid Connections: 108,400

PA New Off-Grid Connections: 163,400

INVESTMENT AND ENABLING ENVIRONMENT

Biggest Issues

  1. Non cost-reflective tariffs
  2. Access to finance
  3. Off-grid sector strategy

Power Africa Interventions

  1. Performed Cost-of-Service Study
  2. Strengthen Utility's Financial Management and Standing

POWER AFRICA’S ENGAGEMENT IN MALAWI

Power Africa is actively engaged in the development of Malawi’s power sector. Power Africa’s partnership with the Government of Malawi is solidified by a Memorandum of Understanding (MOU), which guides the implementation of Power Africa support, including USAID-funded activities that complement the $350 million Millennium Challenge Corporation (MCC) Malawi Compact, as well as broader U.S. Government electrification efforts.

MW GENERATION

In May 2016, Power Africa worked with the Government of Malawi to select an advisor to be embedded in ESCOM. The advisor, funded by USAID, works directly with ESCOM to support the implementation of a framework to facilitate private sector investment by incorporating generation through IPPs within the national energy strategy. The advisor is also nurturing private sector interest in Malawi’s power sector by supporting ESCOM through the negotiations of power purchase agreements (PPAs), providing technical support for future procurements, and building critical capacity within ESCOM itself.

CONNECTIONS

MCC’s Malawi Compact is a program designed to increase incomes and reduce poverty by revitalizing the country’s electricity sector and improving the availability, reliability and quality of power supply. The Compact’s Power Sector Revitalization Project seeks to increase the capacity and stability of the national electricity grid through direct infrastructure support to Malawi’s transmission and distribution systems. Since the MCC Compact began in September 2013, Malawi has added over 100,000 new connections to the grid.

SUCCESS STORY

In December 2016, the Government of Malawi launched the country’s first-ever competitive tender in the power sector by using the procurement framework developed with support from MCC. Twentyone international companies submitted bids to develop 70 MW of new solar capacity. The achievement sets Malawi on a path to diversify its generation mix, bring down costs, and open its door for future rounds of private investment.

FACTSHEET

Last updated: March 28, 2018

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