President Peter Mutharika raised the curtain of the power generation drama, episode in 2018, when in January he commissioned the 55 megawatts (MW) power supply generators at Chichiri Power Station in Blantyre which was to be supplied from diesel-powered generators hired from Aggreko.
But throughout 2018, the Electricity Supply Corporation of Malawi (Escom) and its cousin Electricity Generation Company of Malawi (Egenco) have given Malawians hope, promises, excuses, lies and then hope again. The plot in the power generation drama took twists and turns from low water levels excuses to generators transaction fiasco, misprocurement scandals, tariff increase challenges, bail out rejections and finally, hope from a Zambia power interconnection deal.
As soon as the gensets were commissioned, lies started spewing out of government, Escom and Egenco officials on why the power situation in the country moved from bad to worse. In February, Egenco officials announced that the blackouts would not end due to low water levels in Shire River, the main source of hydroelectric power in Malawi. The Ministry of Agriculture, Irrigation and Water Development, which controls the Kamuzu Barrage in Liwonde, Machinga that controls water flow in Shire River, responded to Egenco’s excuse by opening the barrage gates to allow increased water flow to boost electricity generation.
In March 2018, it was revealed that Malawians were given a raw deal in the Aggrekko generator deal as consumers would end up paying more for electricity. Later, The Nation reported that Malawians would also shoulder the cost of Escom’s emergency diesel energy deal, but it transpired that the consumers would not really enjoy the benefits because the contribution of the newly acquired generators to the national grid would be insignificant.
The deal also brought in the issue of tariff raise. Before acquiring the gensets, Malawians were paying K58.74 per kilowatt (kWh) of electricity, but with the gensets it meant Malawians were to pay K72.54 per kWh. This means a consumer who used to buy 103 electricity units worth K5000, now only gets 92.7 units.
The realisation of the challenges in the procurement of the generators prompted the Anto-Corruption Bureau (ACB) to open an investigation into the procurement of the multi-billion kwacha generators contract Escom. ACB senior public relations officer Egrita ndala told The Nation that the graft-busting body was investigating Escom in relation to the procurement of the generators. “The Anti-Corruption Bureau is conducting an investigation at Escom with regard to the procurement of generators. The investigation is related to the 2017 procurement process,” she said. In the initial procurement process, nine companies, Jocobsen Elekro AS, Aggreko, AKSA Enerji Rental Power, APR Energy, Almagamated Power Solution (APS), Altaaq Global CAT, So Energy International, Greenheart Energy Limited and Sino Hydro were shortlisted for supply of three generators that were to be stationed in three lots each at Mapanga in Blantyre, Kanengo in Lilongwe and Chinyama in Kasungu.
In July, an internal audit at Escom uncovered a multi-billion kwacha heist of Cashgate form from the parastatal where it was suspected that incidents of misprocurement, overpayments and alleged fraud were milking Escom dry. According to the corporation’s internal audit report for the period between January and June 2016, for all the financial malfeasance that the audit report unearthed, no local purchase orders (LPO) or contracts were raised/signed for the procurements. Consequently, states the July 2016 audit report, materials worth over K1.3 billion were misprocured.
In May, Escom asked government for a K54 billion bailout, however, the Ministry of Finance, Economic Planning and Development rejected the request. Then in July 2018, Escom applied for an increase of base tariff which was projected to raise end user tariff from K73 per kWh to around K112 per kWh in the first year of implementation. Escom argued that the average purchase cost for energy from Egenco, independent power producers and power imports was expected to move from K29.92 per kWh to K65.35 per kWh over 2018-2022 Base Tariff period. Despite the Escom request to raise the tariff by 60 percent, in October 2018 Malawi Energy Regularity Authority (Mera) rejected Escom request and ordered the power supplier to increase the tariff by 31.8 percent, a move that did not please Escom. Escom CEO Allexon Chiwaya argued that what Escom requested reflected market trends and that the power supplier needed more money to provide a good service.
Meanwhile, Egenco in July 2018 promised Malawians that it would add 19.5MW to Tedzani Power Plant as the construction works at Tedzani Hydro Power Station had started. The Tedzani IV Hydroelectric Power Plant was to be constructed by Japanese firm Mitsubishi Corporation to the tune of K38.3 billion. Egenco chief executive officer William Liabunya said in an interview the construction of the new power plant will increase capacity of Tedzani Hydro Power Station to 111.5MW from the current 92MW.
In just a month, in August 2018, Egenco announced that it was set to scale up electricity output in its efforts to address the current power outages that have negatively impacted industrial performance. Egenco Spokesperson Moses Gwaza said in an interview that by August end, the generators stationed at Mapanga in Blantyre would add 20MW to the national power grid.
Later in October, egenco was at it again, the company announced that it had plans to increase electricity generation capacity from 384MW to 2 300 MW in 2034.
But earlier in September, Escom, after being snubbed by government on the bailout request, asked banks for a K30 billion loan. In December, the power supplier returned to government for another bailout request after the banks denied it the loans, but it was once again rejected.
Despite all the drama surrounding power generation in Malawi, the country has ended the year with a timid smile of hope. In October, the Millennium Challenge Corporation (MCC) closed MCC Malawi Compact and handed over and commissioned Nkula A Hydropower Station. The rehabilitated and modernised hydropower station now has an additional 30 years of operation and output capacity increased from the original 24MW to 36MW. Early this month Escom and Egenco completed the year with an agreement to import 20MW of power from Chipata in Zambia through Mchinji. The five-year cross-border power supply agreement means that Escom will have more than 220MW of power from the current 200MW.
(Source: The Nation Malawi, 1st December 2019)