President Peter Mutharika has said Electricity Supply Corporation of Malawi (Escom) will split into two companies as announced by Minister of Natural Resources, Energy and Mining Bright Msaka.
Government has been implementing a Power Market Restructuring (PMR) which among others involves the unbundling or splitting of Escom into two parastatals; one for generation of power and the other for transmission and distribution.
Msaka is on record saying the much awaited unbundling of Escom into two companies will be finalised in May this year.
But speaking in Lilongwe, Monday, when he had an audience with the Chief Executive Officer for Millennium Challenge Corporation (MCC) Dana Hyde, President Mutharika explained that another energy company will enter the market as part of the restructuring of the electricity power market under the power sector reform component of the Millennium Challenge Account Energy Compact project .
“ESCOM will soon split into two parastatal companies. We will have a new generation company that will compliment independent power producers in generation of electricity,” said Mutharika.
He further said the Cabinet Committee on Legal Affairs has already reviewed the amendment of the Electricity Bill and Cabinet will approve it for tabling in the next sitting of parliament.
Mutharika said government is committed to improve access to quality and reliable power in order to stimulate economic growth and reduce poverty in the country.
“Currently, about 10 per cent of Malawians are accessing electricity and it is governments wish to ensure that 30 per cent of Malawians are connected to electricity by the year 2025.
“For us to achieve this number we require to increase the current 351 Mega Watts power generation to more than 2,500 Mega Watts in the next 5-10 years,” he said.
For the compact to be successful, the President said there is need to ensure that government continues to invest in the people, rule justly and facilitate the people to access economic opportunities and freedom.
Speaking on the benefits of the compact, the president said the project has regional benefits.
He said, currently Malawi is not connected to the Southern Africa Power Pool (SAPP), but with support from USA Government through the Compact and upon completion, the country will have adequate structure and infrastructure to connect to the SAPP for import and export power.
“The 400KV Phombeya Substation will be the landing and take-off point for the Mozambique Interconnector. The new Lilongwe 400KV Substation in Nkhoma will be the landing and take-off point for Zambia Interconnector.
“132KV new Bwengu Substation in Mzimba will be landing and take-off point for the Tanzania Interconnector,” said Professor Mutharika.
The President then said he was happy that compensation of close to 7,000 people affected by the project through cash and replacement of houses has begun.
“I am informed that compensation started in December 2015 and that 95 per cent of the people between Balaka and Lilongwe have been paid. And over 100 houses are under construction by contractors recruited under Millennium Challenge Account (MCA) Malawi.
Speaking after meeting the president, Chief Executive Officer for Millennium Challenge Corporation Dana Hyde said she was happy with the strides made in the project.
She said the compact is on truck and that much potential put in the sector will improve economic development for the country by increasing access to electricity.
“The important work that has been done so far is the work and reforms that are taking place in the energy sector which aims at turning it to a regional power sector,” said Hyde.
Speaking earlier Msaka, said Malawi qualified to receive aid from USA Government through Millennium Challenge Corporation (MCC) in 2007.
He said Malawi chose the energy sector to be improved and was happy that huge progress has been made.
Msaka cited reforms at ESCOM and opening up of the power market as crucial areas.
“About 31 independent power service companies have shown interest to help ESCOM in the energy sector. So far seven of these companies have signed Memorandum of Understanding to start their work and we hope the rest will also do the same,” said Msaka.
He said the old infrastructure will be modernized and expanded, adding that Nkula will have new equipment of 20-32 Mega Watts.
Malawi’s $350.7 million (245 billion Kwacha)MCC Compact is a single-sector program designed to increase incomes and reduce poverty by revitalizing Malawi’s power sector and improving the availability, reliability, and quality of the power supply.
The compact is composed of three projects which seek to increase the capacity and stability of the national electricity grid and bolster the efficiency and sustainability of hydropower generation.
The Millennium Challenge Corporation (MCC) is an independent U.S. foreign aid agency that is helping lead the fight against global poverty. –Additional reporting by Christina Mkutumula, ManaFollow and Subscribe Nyasa TV :