Malawi Energy Regulatory Authority (Mera) says the $4.4 million (about K3.6 bilion) renewable liquidity guarantee secured by JCM Matswani Solar Corp Limited does not affect the power purchase agreement (PPA) approved by the authority.
In a written response on Friday, Mera consumer affairs and public relations manager Fitina Khonje said the eight cents (about K656) per kilowatt hour tariff agreed between Escom and JCM and ultimately approved by Mera still stands.
She said: “As part of the PPA negotiations between Escom [buyer] and JCM Matswani Solar Corp Limited [seller] then, the latter wanted to secure assurance that once power trading starts, they will be able to be paid on time by the former.
“However, considering the financial status of Escom then, JCM demanded that Escom should provide a guarantee that they will not negate on their obligation to pay JCM on time when power trading starts between the two parties.”
Khonje said this meant that Escom had to look for finances to provide that guarantee.
“Since Escom was financially handicapped, it could not raise such an amount as a guarantee to JCM. This is where African Trade Insurance Agency [ATI] stepped in to provide such a guarantee,” she said.
In an earlier statement, JCM Matswani Solar Corp Limited country director Phylip Leferink said the firm will enter into operations phase this month.
The energy generated by the firm, at an estimated annual average of 154-gigawatt-hour, will be exclusively sold to Escom under a 20-year PPA.
The facility policy will be for an initial tenor of up to 10 years and enable up to $78 million (about K64 billion) of total project financing.
The 60 megawatts (MW) Salima Solar Photovoltaic (PV) Plant is the second project in the country to benefit from the facility after the Nkhotakota Solar Power Plant, which has an initial installed capacity of 21MW.
Meanwhile, out of the 10 independent power producers (IPPs) that were approved to generate and sell power to Escom since 2018, JCM and Mulanje Hydro have registered notable progress.
Ministry of Energy spokesperson Saidi Banda is on record as having said that most of the IPPs are currently looking for finances for the projects.