The roll out of Power Market Limited (PML), a parastatal born out of the power sector reforms, has generated debate from various stakeholders, including consumers who argue it is ill-timed.
The new firm was granted a single buyer licence by the Malawi Energy Regulatory Authority (Mera) in December 2020 to buy all electricity from power producers , including importing and selling this electricity in Malawi.
The firm is a creation of power sector reforms project, a component of the $350.7 million (K242 billion) five-year Millennium Challenge Corporation (MCC) energy compact that aimed at improving power generation, transmission and distribution infrastructure.
But Consumers Association of Malawi executive director John Kapito, in an interview on Tuesday, argued that the country at the moment cannot do with a company solely meant to buy power when generation of electricity is minimal.
He said: “We have been discussing this with the government stating that perhaps this could have come at a later stage when the country is generating enough electricity but right now, what is it going to be buying?”
In a written response on Wednesday, Mera consumer affairs and public relations manager Fitina Khonje said PML will ensure that all market players are duly and timely paid for the services they would have rendered in the power market.
“The major motivation is to ensure efficiency and transparency in power market transactions and we believe it will work in Malawi as it is a model that will give confidence and assurance to investors in power generation,” she said.
Minister of Energy Newton Kambala, in a separate interview on Tuesday also backed the operationalisation of the new entity, saying it needed to start its operations.
He said the company was formulated in view of the reforms that the country undertook with support from the MCA to revive the country’s energy sector.
Betchani Tchereni, associate professor of economics at the University of Malawi’s The Polytechnic, said he expects the operationalisation of the new company to reduce inefficiencies in the power market.
He said: “We want to believe that Escom was burdened with much to do on its part; hence, the coming of this company should relieve Escom of its heavy burden thus improve efficiency.”
On his part, Chancellor College economics professor Ben Kaluwa said the company should aim at bridging the current electricity supply gap.
“The country is suffering great losses due to the inefficiencies at Escom thus anything to eliminate that offers hope. We, however, hope the company is cost efficient.” he said.
But energy consultant Grain Malunga said the country could do without the company.
The energy sector reforms started with the unbundling of Escom into two entities, residual Escom and Electricity Generation Company.