Malawi at risk of losing World Bank loan on electricity interconnection
The Malawian government risks losing a World Bank loan if it fails to approve, with the next five weeks, the project to interconnect the Mozambican and Malawian electricity grids.
This project seeks to build a 220 kv interconnection and transmission line between the Matombo sub-station in the western Mozambican province of Tete, and Phombeya in Malawi.
According to a report on Radio Mozambique on Tuesday, the project is budgeted at 48 million dollars, and a loan was granted by the World Bank in 2007 – but the loan agreement has not yet been approved by the Malawian authorities.
If the requisite approval is not granted by 15 March, Malawi is likely to lose the money.
Access to the credit depends, under Malawian legislation, on the government bringing the loan agreement to parliament for its approval. The Malawian parliament has no means whereby it can oblige the government to present the agreement by the mid-March deadline.
The loan was granted over two and a half year ago, in July 2007. Eventually the World Bank gave Malawi an ultimatum – the loan had to be approved by December. But that deadline came and went, and there is now a second deadline of mid-March.
While awaiting for approval of the loan by the Malawian parliament, the World Bank and the Mozambican electricity company, EDM, have been negotiating project implementation on the Mozambican side of the border.
The project envisages 220 kilometres of new transmission line inside Mozambique, and 76 kilometres inside Malawi.—Allafrica.com
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