CDEDI corroborates leaked documents suggesting that EGENCO was created to ‘milk’ ESCOM

Fierce Tonse Alliance critic and Executive Director for Centre for Democracy and Economic Development Initiatives (CDEDI) Sylvester Namiwa, has corroborated findings in leaked documents, which suggest that Electricity Generation Company (EGENCO) and Power Marketing Limited (PML) were created to siphon money from Electricity Supply Corporation of Malawi (ESCOM).

The Democratic Progressive Party (DPP) administration created EGENCO and PML where it employed its operatives.

Sylvester Namiwa

There are suspicions that PML management, one of the companies established to ensure effective power supply, could be at the centre of what is suspected to be political sabotage against the current Tonse Alliance Administration.

Leaked documents have revealed that DPP operatives are managing PML who hold positions from the most top management level and have been at the centre of frustrating investments in the power sector.

Rosemary Mkandawire, a DPP operative and one time party candidate for a parliamentary seat in Mzimba, is the Chief Executive Officer while other political cadres from the former ruling party hold other senior positions.

Apart from Mkandawire, PML is full of known DPP cadres such as Muchanakwaye Mpuluka, Vilant Ndasowa, Sam Madula and Dadi Sinthambi and these are the ones calling the shots at PML, an organization, which has conspicuously been silent as the country faces non-stop blackouts despite its crucial role in the electricity supply equation.

In a statement titled ‘Unmasking Causes of Electricity Woes in Malawi’, which he issued on Wednesday, Namiwa recommends that EGENCO and all independent power producers (IPPs) should be stopped from milking ESCOM with immediate effect.

The firebrand human rights activist says CDEDI has established that the causes of the wrangle between ESCOM and PML is over the ownership of the Single Buyer licence.

“CDEDI has found out that in 2016, when DPP was in power under Professor Arthur Peter Mutharika, MERA awarded four licenses to ESCOM following the amendment of the Electricity Act of 2016, that also led to the unbundling of ESCOM, which resulted in the birth of EGENCO as a power generation company. The licences that were awarded to ESCOM by MERA are: Transmission for 30 years; distribution for 20 years; System Market Operator for 25 years; Single Buyer for 25 years,” thus writes Namiwa.

He further says in February 2020, during the Mutharika administration, a decision was made by the Malawi Government to further unbundle ESCOM, to form another company known as PML thereby taking over the single buyer functions from ESCOM, when Section 5 of the Electricity Act (amended) 2016 clearly states that the MERA shall issue licences for system and market operation and single buyer to the current holder of transmission and distribution, which is ESCOM.

Namiwa stated that this led to tug-of-war between ESCOM and PML.

“And this is threatening the survival of the energy sector and if not resolved speedily will soon degenerate into demotivation and sabotage,” he said.

He added, “Despite putting on hold the transfer of Single Buyer functions from ESCOM to PML, electricity users are paying PML MWK800 million per week. CDEDI’s investigations have so far revealed that ESCOM has paid PML up to MWK6.4 billion between January 2020 and February 2022. ESCOM is buying power at various rates from various plants. For example, Mulanje Hydro is selling at MWK168.36 per Kilowatt per hour; JCM is selling at MWK230.36; EGENCO is charging at MWK25 from Wowve plant and MWK140 from its diesel-powered plants. On average, ESCOM is buying power at MWK74 per Kilowatt per hour and is selling the same to the consumers at MWK104 per Kilowatt per hour.”

Namiwa said due to the mess DPP created at ESCOM, the corporation is now losing about MWK1.2 billion annually in the Mulanje Hydro contract and this will continue for the next 25 years of the contract.

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