Power struggle: K65.9bn dispute between Escom and Egenco fuels tariff anger in Malawi

Consumer groups accuse state utilities of “financial gymnastics” after disputed debt was written off following government intervention.

A protracted dispute between Malawi’s two state-owned electricity utilities has drawn public criticism after a K65.9 billion billing discrepancy was resolved through a combination of debt write-offs, tariff adjustments and a government bailout — leaving consumers to absorb costs twice over, according to critics.

The disagreement centres on the Electricity Supply Corporation of Malawi (Escom) and the Electricity Generation Company (Egenco), which have disputed the size of outstanding power purchase payments for months.

The disputed sum was initially recorded as debt owed between the two entities, but was later adjusted under revised tariff arrangements rather than settled directly.

The government subsequently provided financial support to stabilise the sector — funding that ultimately comes from taxpayers already facing higher electricity charges.

John Kapito, a prominent consumer rights advocate, said the arrangement meant ordinary Malawians were effectively paying twice: once through public money used to prop up the utilities, and again through increased tariffs.

“Malawians are being made to carry a burden that isn’t of their making,” Kapito said, calling for greater transparency in how the dispute was resolved.

Officials at Escom and Egenco have defended the adjustments as necessary to maintain financial stability within the power sector and ensure continued electricity supply.

However, industry analysts and consumer groups say the episode highlights weaknesses in oversight and contract transparency between the two entities, both of which remain wholly state-owned.

Questions are now being raised in parliament and among regulatory bodies about how the discrepancy arose in the first place, and whether adequate scrutiny was applied before the write-off was approved.

The Malawi Energy Regulatory Authority has not yet issued a public statement on the matter.

Calls for an independent audit of the transaction are growing, with critics arguing that without one, the true cause of the shortfall — and who should bear responsibility for it — may never be fully established.