Malawi to renew genset deal with Aggreko: Cama wants contract review public
Malawi government says it will renew the contract with Aggreko Power Solutions Limited for the diesel-powered generators to shore up available power.
Minister of Natural Resources, Energy and Mines, Bintony Kutsaira, confirmed the deal will be renewed at its expiry in January 2020.
Kutsaira said despite the diesel powered generators were expensive, they have stabilised power supply.
Electricity Generation Company (Egenco) spends over K3 billion per month to buy fuel for the generators running to complement hydropower generation.
“Government thinks it is better to have expensive power than having none at all,” said Kutsaira.
Information on Egenco website indicates that the company has 25 diesel power plants in Blantyre, Lilongwe and Mzuzu and Kutsaira said they are producing 78 megawatts.
According to Kutsaira, the hydro generators are producing less than 2000 megawatts as Shire River is not getting adequate water supply.
He said the generators could be dumped when Malawi finalises its interconnection deal with Zambia, saying China has committed to fund $30 million to connect Chipata in Zambia and Nkhoma in Lilongwe, Malawi.
“This deal will bring 80 megawatts,” said Kutsaira.
In December last year, Principal Secretary for Natural Resources, Energy and Mining Patrick Matanda confessed, when he appeared before the Parliamentary Committee of Government Assurances, that running costs of the generators were high and unsustainable.
Catholic University of Malawi economist Gilbert Kachamba said using generators is costly and unsustainable for the country’s economy.
He said Egenco should be seeking cost-effective electricity generation and a long-term solution to the electricity challenges in the country.
“Otherwise, operating the generators will not help us because they are unsustainable and an expensive venture for the country. When we were getting these machines, my understanding was they were a short-term solution towards our problems, but running them for long-term is a non-starter,” said Kachamba.
And Consumer Association of Malawi (Cama) executive director John Kapito has suggested that the contract renewal with Aggreko should be reviewed at a public forum.
Electricity Supply Corporation of Malawi (Escom) also leased 84 diesel-powered generators from Aggreko in Dubai for two years (January 2017 to December 2019). The gensets added 78MW to the national grid.
However, use of the gensets resulted in a 24.67 percent increase in electricity tariffs.
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This is a non starter indeed. How many projects have been exposed to curb power supply issues????This is one way of milking a thin cow.Do not take Malawians for granted.Bintony Kutsaira have never felt the pinch of money problems.We are poor to be just pouring money into an holed tin.The best way is to try MCP into power to remove nyasi ngati izino.Komano MCP mmene ndikuidziwira e heee ndi manyi manyi tuuu.Umpahwi udzafika pamwana wakana phala.Komano ndani angatipulumutse kuchiNjoka ichii.Chifukwa zikukhala ngati chinjoka chokalamba chija chadzuka kumanda chija ndi Bingu wa Mutharika.Kukwiya chifukwa Mulungu anamuthamangitsa kuopa kuti angaononge dzikoli
Don’t renew the deal. If anything, install your own gensets at strategic sites. After all, we supply diesel to Agreko. Power Generation Lease Agreements are not cheap.
By the way, where are we with Solar Energy Agreements. I am sure most likely suppliers just wanted to acquire land in Malawi judging by the way land prices have shot up in candidate sites.