Second Malawi compact fate in December, says MCC


The Malawi government is expected to know in December this year whether it qualifies for the second compact after the expiry of $350.7 million (K256 billion) five-year energy compact in September 2018.

Millennium Challenge Corporation (MCC), a United States government agency, provided the money for the energy compact, which is a single sector programme, to support the Malawi government to increase the capacity and stability of the national electricity grid and the efficiency and sustainability of hydropower generation.

Massi (3rd L) explains a point at the construction site

In an interview on the sidelines of a visit by the Minister of Natural Resources, Energy and Mining Aggrey Massi at Phombeya sub-station in Balaka on Friday, MCC Malawi resident country director Molly Glenn said every year in December, the board of MCC, chaired by Secretary of State Rex Tillerson, meets to look at eligible countries and Malawi is one of them.

“They will be looking at the scorecard performance; that is how the country is being governed. The scorecard is actually coming out in a week and you will see how Malawi is doing once it is published,” she said.

Glenn said the Malawi government and the compact implementing agency, Millennium Challenge Account Malawi (MCA-M), have made a lot of successes, stressing that they have worked hard and the infrastructure development is moving forward.

She said the MCC board will also consider the success on the reform side that includes the capacity building at Electricity Supply Corporation of Malawi (Escom), Malawi Energy Regulatory Authority (Mera) and Electricity Generation Company (Egenco) in terms of aligning the tariffs with the cost of doing business.

“Those are the factors the board looks at to make sure that the government is ensuring that the needed reforms are done to sustain this investment,” she said.

The compact programme comprises three components, namely infrastructure development, power sector reforms and environment and social performance.

Thus far, 89 percent of the compact grant or $312 million (K228 billion) has been committed and 57 percent of the committed funds or $177 million (K130 billion) has been disbursed, according to MCA-M.

On his part, Massi said he is impressed with the progress of the work despite a number hiccups encountered.

“There are some hiccups here and there but I have been told that 90 percent of the equipment is already here and the way they are performing, they will meet the deadline [of September 2018]”, he said.

MCA-M chief executive officer Dye Mawindo said a lot has happened on the project.

“In terms of progress, we are at almost 60 percent on average,” he said.

The Phombeya sub-station will cost $30.9 million (K23 billion) and involves the construction of the 173 kilometre 400 kilovolt (Kv) overhead transmission lines from Phombeya to Nkhoma in Lilongwe. n

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