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.

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.