Escom goes to banks for K30bn loan as Malawi govt rebuffs bail out
State power utility company, Electricity Supply Corporation of Malawi (Escom) has now gone to commercial banks to get a staggering K30 billion to pay out crucial outstanding debt after the government refused a K50 billion bail-out.
Escom chief executive officer Alexion Chiwaya told the parliamentary Budget and Finance committee on Tuesday that the decision to get the bank loan was arrived at after the government refusal to bail out the power utility company.
“We are still talking to National Bank, Standard Bank, Ecobank, NBS and others on the loan and the interest they will charge us,” said Chiwaya.
He said Escom owes Electricity Generation Company (Egenco), Malawi Energy Regulatory Authority (Mera) and Aglenco billions of money after the government decided to unbundle Escom.
“Actually, we posted a loss of K8.8 billion in the 2016/17 financial year because of the changes,” Chiwaya told the committee.
He said Escom would be paying K800, 000 every month for five years for the K30 billion bank loan.
“We desperately need the K30 billion to keep us afloat to continue providing electricity to people,” said Chiwaya.
Chiwaya said Escom uses K58 million in fuel for gen sets to power electricity at Chichiri in Mulanje, Lilongwe and Chinyama in Mulanje for just six hours.
This revelation comes at a time when Escom has lost 4, 000 litres of fuel for the gen sets through corruption and theft.
Vice chairman of the Budget and Finance committee John Chikalimba said the K30 billion will bring more financial chaos at Escom.
He said Escom should have asked for advice on the issue from the parliamentary committee.
Follow and Subscribe Nyasa TV :
It is not just practical what is being said here! Giving a loan to porus pockets! Chineke
lol K30bn to give Dpp? escom and egenco needs reforms and an ACB officer on site
Extending a R30b facility to Escom is probably one of the most careless exposure the banks can ever take as it clear that the customer is not creditworthy and therefore will default within a year. This will then the beginning of undermining our own big 4 financial Institutions and may collapse entire industry. The consumers on the hand will be forced to pay higher tariffs due to the incompetence and corruption within Escom ranks. The solution therefore is to appoint a competent board and executive and fire the current one or even file a criminal case against all of them. This is treason of the highest order given that energy is a national security.
ACB tip. investigate buy Malawi contracts known as BMC at Central medical stores Trust, they are stinking of corruption draining Malawis health budget
“This revelation comes at a time when Escom has lost 4, 000 litres of fuel for the gen sets through corruption and theft.”
4,000 litres is not even one tanker-load. Was it not published elsewhere that the loss was one million litres?
4 million litres according to latest estimates by those in the know
There is so much dirt in ESCOM and they need to sweep the house. It is not true that they need this money. Its merely political. Someone wants to fund electoral campaigns ndithu.
ESCOM should be an institution that should be able to feed this country because they collect alot of revenue which are not properly utilized. There are so many misprocurements and abuses. The management do not know how to set priorities.
I wonder which bank would be able to grant them the facility they want, may be FDH Bank will do. ESCOM has demonstrated that it is a very risky company to do business with and no reliable bank would offer this facility to the institution.
My humble advice to bwana Chiwaya is that go China way and you will get the money. Afterall the Chinese are keen to fund these types of projects because they have their interests. Am sure these statements are coming in after the recent china trip of governement officials and someone wants to justify the need to borrow funds from China. Ingopangani zomwezo and osatiphimba mmaso apa ndi request to bail out.
We all know ESCOM is government’s cash cow where every government official and some chief can just walk in and demand money.
Today you need funds to be bailed out. Thats absolute nonsense.
Today ESCOM should not have been renting property as offices. The building that got burnt in Blantyre should have been rebuilt by now even with Insurance funds and own funds. But because of internal politics in ESCOM, no one is granted the project to start working on the building. Are you telling us that Insurance didnt pay for the money or the money got sunk in someones pocket.
ESCOM needs alot of cleansing because there some people who are used to thievery in that organization and they seem not to be interested to change. ESCOM needs a complete overhaul.
How can someone run down a company the way he has and still have the job. He is borrowing from banks so he has money to give to his friends as stupid contracts. What is the matter with us fellow Malawians
K800,000 for 5 years? 4,000 ltrs lost? Am i missing something?
There’s no banker with half a brain that would lend any decent sum of money to a loss-making institution with non-existent corporte governance like ESCOM. The solution here is very obvious:
1 – ESCOM must be let go of corrupt government ownership. Privatise and list on stock exchange
2. -Electricity prices must be liberalised and increased.
Lazarus Chakwera munamutsutsa ukulankhula zimezo, lero ndizimenezi tsopano, ndipo uku mkuyamba chabe sizinati hahahahahahahaha!
Chineke!!! Mr Chiwaya hold it there,K800, 000 or K8000,000?? because even just as a cost of debt (excluding the principal) ,K800,000 seems to be right on the lower side…dont confuse us with ZEROs baba!!…Tell the nation how much they will eventually pay back!
Zimvele muntolo mwakula mwatha musova, Dausi ali pheeeeeeeeee ndi nzake pwita munthalika after kutong’olapo zawo……. moto usata kwatsala tchire ndithu ndipo apumbwanu ndi upumbwa wanu muvungidwadi ndi legeni