Government is under severe pressure to effect reforms at Electricity Supply Corporation of Malawi (Escom) and tackle corruption seriously after threats from the US to withdraw the US$350m Millennium Challenge Account if the issues are not addressed.
The US wants the government to remove the Democratic Progressive Party (DPP) dominated board, tackle chronic graft at the power utility state company and the introduction of tariffs which should be economically viable.
The US ambassador to Malawi Virginia Palmer has since threatened the withdrawal of the second phase of the MCC if the issues are not addressed.
“Malawi will obviously complete the first phase but the second phase funding will depend if the issues raised have been addressed,” said Palmer.
There have been wide reports of corruption in the procurement of materials for the MCC.
The US has also openly said the DPP dominated boards at Escom and Electricity Generation Company (Egenco) is a contributor to the inefficiencies at the two institutions.
The MCC project aims to improve the energy sector especially in the distribution of electricity.
The government is yet to respond to Palmer’s comments.