Government expects the Kam’mwamba Coal-Fired Power Plant Project to start this November after signing 10 agreements with China last week.
According to Minister of Finance, and Economic Planning and Development Goodall Gondwe government has agreed with their counterparts in China to have major shareholding of 85 percent while China Gezhouba Group will have 15 percent.
The 300 megawatts (MW) coal-fired power plant project failed to start last year because the agreements had not yet been finalised by the two countries.
A report on the project published earlier this year, said lack of a feasibility study, the Power Purchase Agreement (PPA) and the creation of the company to operate the project were some of the issues that were still standing in the way for the project to commence.
But recently, a team of experts from Malawi which included the Principal Secretary in the Ministry of Energy Patrick Matanda were in China for two weeks, negotiating with China Gezhouba Group on the project.
“We had a big delegation in China, for the past two weeks. We have agreed on so many issues, including supply of coal from Vale,” said Gondwe adding that government will soon sign an agreement with the Brazilian Mining Company, Vale Logistics Limited to supply coal for the next 30 years.
“The Vale team has agreed and will sign the contract. We need large supplies of coal. The deal will not prevent [the power plant] from purchasing coal locally,” Gondwe added.
The finance minister said the coal-powered plant will need 3 134 metric tonnes (MT) of coal per day, and it shall be operating around 20 hours a day once commissioned.
Gondwe further said out of the $104 million (about K75.9 billion) required commitment fee, government has $12.4 million (about K9 billion) for the project, revealing that it will be paying the money in installments.
“We are not paying this amount of money at once, it will be done in installments. We are starting with $12.4 million which we have,” explained Gondwe.
Mining expert Grain Malunga has since faulted government for agreeing to importing coal from Mozambique, saying ‘it doesn’t make sense’ as the coal industry in Malawi needs to grow.
He said while many countries are shunning the coal power stations, there is need for government to show commitment to combat climate change by using the right technology at the plant.
“Everybody in the world is worried about coal power stations because there are technologies which can be introduced to take care of pollution so it all depends on government’s commitment to combat climate change. They should not leave the Chinese to pollute Malawi skies,” explained Malunga.
The project is being financed by a loan from Export and Import(Exim) Bank of China to the tune of $667 million project. The Malawi Government is required to source $104 million as commitment fee.