Malawi idle independent power producers risk their licences being revoked

Malawi government will terminate contracts of Independent Power Producers (IPP)s whose works have stalled for invalid reasons risk their licences being revoked, Minister of Energy Newton Kambala has warned.

Minister of Energy Newton Kambala  warns IPPs

Kambala said his ministry intends to audit the progress of IPPs and that those who are not serious will be replaced.

The stance by the minister followed revelations from the Malawi Energy Regulatory Authority (Mera) that out of 11 IPPs that were approved to generate and sell power to Electricity Supply Corporation of Malawi (Escom), only two are operating while another IPP, JCM  Matswani Solar Corp Limited (Golomoti), which is expected to produce 60 megawatts (MW) solar power had shown progress.

And Cedar Energy Limited is also making progress in rolling out power generation facilities in Mulanje. These signed in 2018.

Idle IPPs include H.E Power which signed in 2017 while Phanes Energy Renewables Nkhotakota Ltd, Quantel Renewable Energy Ltd, Droege Mzimba Wind Farm Limited and Droege Monkey Bay Solar Farm Limited signed in 2019.

Some IPPS are way passed their backstop date while some will clock in May 2021

Kambala said a review has to be done for those which have passed the backstop dates if no tangible evidence of progress being made on the project they will be terminated for failure to fulfill their contractual agreements.

Former Escom chief executive officer Kandi Padambo said the importance of  close follow-up and monitoring cannot be over-emphasised as the country is in dire need of power.

However, he pointed out that those who signed  the contracts in 2019-2020  have faced political instability as well as Covid-19  crisis which made it impossible for any Investor to make progress with travel bans in place, hence there is need to allow more time to roll out.

Ministry of Energy  spokesperson Saidi Banda  said : “We know with the new wave of Covid-19, they will be impacted, but most of them are currently looking for finances for the projects.”

Currently, Electricity Generation Company produces about 350MW of power.

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Concerned citizen
3 years ago

Malawi will not develop adequately until we have more than adequate power supply generated sustainably from within our boarders, with excess to export.

ESCOM is a totally inefficient entity which needs a complete overhaul as it is wastefull at both the operating and procurement level.

There were so many pledges about IPPs which have not been met to date. Axe them and get serious operators.

We cannot afford to be held ransom by a few …

3 years ago

I am sure you can see who is making progress and who is not and a decision to terminate can thereafter be made. There must be proper documentation and progress reports to show how Covid 19 pandemic and any other factors have impacted on projects.
Prospective Suppliers should not be spared if there ample evidence that there is no progress but under no circumstances should poor performers be spared just because we need more installed MWs.

3 years ago

What is your problem honourable Minister Kambala ? Why termination of contracts? Do you have any alternatives, if this investors are gone? I guess not? Or what are your benefits out of such a decision? I wrote already my opinion yesterday to this topic! I appreciate that the former ESCOM boss (and frontline politician Mr Padambo) and your colleague in the ministry see it similar! If you have no alternatives you rather go back to this failing or reluctant investors and find out! Please let us know! Your priorities concerning electricity should be rather: clearing the mess at ESCOM, like… Read more »

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